Is Gold’s Bull Run Just Beginning? My Take on This Once-In-A-Decade Opportunity
A blog post by Dr. Ben Lin. Subscribe to any of our services for exclusive member’s only blog posts.
Disclaimer: Dr. Lin has written this article originally in Chinese and used AI to translate it to English.
A “Golden Era” for Individual Investors: Here’s Why I’m Paying Attention
In my view, gold is experiencing what can only be called a perfect storm. Since 2016, I’ve been tracking how the core driver of this rally is the ongoing global erosion of trust in the US dollar. We’ve seen the dollar’s credibility crack three times now, each time pushing gold higher: during the 2016 U.S.-China trade war, the 2022 removal of Russia from SWIFT, and now, with the Fed’s independence under scrutiny. Each geopolitical shock seems to add more fuel to gold’s climb.
Central Banks Are Buying Aggressively – Shouldn’t We Take Note?
While some in the market debate whether gold is “too expensive,” I’m watching global central banks as they’re voting with their wallets. The data is clear: since 2016, they’ve been steadily swapping U.S. Treasuries for gold, and that trend has only accelerated since 2022. They’re buying nearly regardless of price! Even more striking: a recent World Gold Council survey showed 95% of central banks plan to continue buying over the next year. With these market “whales” providing such strong support, I don’t lose sleep over short-term fluctuations.
A Look Back at 50 Years of Gold: Why I Believe It Belongs in Your Portfolio Now
As the saying goes, history doesn’t repeat, but it often rhymes. Here’s how I see it:
- 1970s: Repeated USD crises sparked a decade-long gold bull market.
- 1980s–2000s: The “petrodollar” system took over, and gold entered hibernation.
- 2000–2008: China’s WTO entry reawakened gold demand.
- 2009–2016: Gold became a tactical trade, often moving inversely to the USD.
- 2016–Present: USD credibility is faltering again, gold is reclaiming its throne.
Why Today Reminds Me of the 1970s – Before the Last Major Bull Run
Right now, the U.S. debt-to-GDP ratio is approaching extreme levels like what we saw during WWII and the pandemic. Fiscal conditions today feel eerily like the Vietnam War era. The system that supports the US dollar” global trade settled in USD” is showing cracks, much like the Bretton Woods system before its collapse. That period launched gold’s most spectacular bull market. I see similar potential today.
This Time It’s Different – USD Dominance Could Be Permanently Weakened
Back in the 1980s, the U.S. rebuilt dollar dominance through the petrodollar, backed by strong manufacturing and global influence. Today, with U.S. industrial capacity hollowed out, I don’t believe it will be so easy to restore a single reserve currency if the current system weakens further. We may be entering a new era, one defined by multiple currencies, with gold as a core hard asset. That implies a long-term structural bull market for gold, in my opinion.
My Spotlight for Australian Investors: Smart Ways to Get Exposure
As an Australian investor myself, I see compelling local opportunities alongside these global trends:
- Gold ETFs: On the ASX, I like GOLD for low-cost, liquid exposure to physical gold.
- Gold Miners: For leveraged exposure, I follow leading ASX-listed producers like Northern Star (NST) and Evolution Mining (EVN). They offer growth potential and often pay dividends.
- Physical Gold: I also consider products from The Perth Mint a tangible, secure, and easy to transact in various sizes.
The “Aussie Dollar Gold” Advantage: Why It’s Worth a Closer Look
I’ve noticed that gold priced in AUD often outperforms USD-priced gold. That’s because the Australian dollar tends to move with the commodity cycle.
Local gold miners also typically benefit from lower hedging costs and more predictable earnings.
Plus, there’s potential tax efficiency, especially if you hold gold investments for more than 12 months, you may be eligible for the CGT discount.
A Final Note – Always Be Aware of the Risks
Of course, no investment is without risk. I keep a close watch on the international situation, potential unexpected expansions in gold supply, policy shifts from the government or RBA, and currency fluctuations.