History does not simply repeat itself, but often carries the same rhyme.
Looking back over the past half century, every time gold has entered a bull market, it has almost always been accompanied by a 'cardiac arrest' in the global economy.
The gold frenzy of the 1970s, interspersed with the oil crisis and financial turmoil of 1974.
The round that started in 2001, especially pushed gold prices to a dual climax of emotion and value during the outbreak of the subprime mortgage crisis in 2008.
So, don't just focus on the gold price numbers; a gold bull market often acts like a 'heartbeat monitor' when the world economy is in critical condition— the louder the beeping, the busier the 'operating room'.
The variable that keeps people awake the most right now: the US dollar, this 'old engine'.
If gold is the 'leading man' of the safe-haven play, then the US dollar is the 'director' that always changes the script at critical moments. What I truly worry about is not the gradual devaluation of the dollar, but whether it will suddenly 'collapse'—like in 1971, when it experienced a wave of catastrophic devaluation.
Even if it doesn't collapse, if the policy direction in the US changes dramatically next (for example, if a former president with a striking hairstyle returns to the White House), the long-term weakness of the dollar has almost become market consensus. But take note! Right now, gold prices are soaring, which may have already priced in this expectation. It's like hearing a typhoon is coming, and all the instant noodles in the supermarket are sold out; when the typhoon actually makes landfall, nobody is lining up anymore.
Gold under the crisis script: first take a beating, then be deified.
Even if a crisis truly breaks out, gold won't rise from start to finish. During short-term panic, the market will favor 'cash is king', and all assets are likely to fall indiscriminately, making gold hard to avoid a punch. But historically, often after a crisis breaks out and before policies are eased, gold tends to show a 'bounce—peak' rhythm.
So, don't be the 'bag holder' at the peak of emotions, especially for leveraged players, be careful not to get shaken out by short-term volatility. More importantly—don't just look at gold, forget the whole scene.
Opportunities always favor those with cash.
I often ramble in the community: earn on paper in a bull market, earn chips in a bear market. The real opportunities often appear when everyone is shouting 'there's no hope'. If a financial crisis really comes again, not only gold but also high-quality global assets will be sold at a discount. At that time, whether you have 'bullets' in hand will determine whether you are crying by the roadside or pushing a shopping cart to pick up bargains.
I don't like to create anxiety, but the truth is: gold craziness often serves as a thermometer for an overheating economy. As an old hand, my principle is: enjoy the excitement but keep your wallet safe; read history more, and diversify your positions.
If you also believe that 'opportunities come from declines', why not follow me? I may not have soup every day, but at critical moments, I will always remind you. After all, everyone is a teacher in a bull market, but only in a bear market do you know who is swimming naked.
Remember, the first lesson of investing: living long is more important than earning fiercely.
(If you find this article somewhat useful, feel free to follow. No matter how crazy the market gets, we can stay sober together.)
