From $200 to the all-time high: Two lessons from the surge in gold and silver

History is always more honest than candlestick charts.

Recently, many investors have been asking the same question: Will gold continue to soar? Is silver finally catching up? Before answering, we need to take a close look at history. Because regarding the precious metals market, history has already given two answers, and in both cases, the outcomes were not what people wanted to hear.

First Lesson: 1979-1980 from $200 to Bubble Burst

That year, the world experienced unprecedented chaos. Oil crises, hyperinflation, geopolitical conflicts—global monetary and credit systems were repeatedly shaken.

Gold prices rose from $200 to $850, quadrupling in a year. Even more crazy was silver, which jumped from $6 to $50. Everyone believed that the “beginning of a new order” had arrived.

But the market’s response was brutal:

Just two months later, gold was halved. Silver fared even worse, dropping by two-thirds. This was followed by a 20-year period of silence—no sharp rises or falls, just eroding investor confidence.

Second Lesson: 2010-2011 Familiar Script, Different Actors

The story replayed in 2010. This time, the backdrop was the post-global financial crisis era, with central banks flooding the markets with liquidity.

Gold rose from $1,000 to $1,921, and silver again surged near $50. The scene was almost identical, and investors remembered gold’s historical role—as a crisis hedge asset.

What was the result? Gold retraced 45%, and silver plummeted 70%. The following years were marked by continued declines, sideways consolidation, and erosion of confidence among holders.

Crucial Rules of the Precious Metals Market

Careful observation of these two cycles reveals a clear pattern: The more dramatic the rise, the sharper the fall.

And this pattern is most evident in the precious metals market. Every rally seems “completely justified”—whether due to runaway inflation, liquidity flooding, or geopolitical tensions. The logic is always sound, but timing is always the cruelest factor.

Currently, gold and silver prices are already diverging significantly from their historical volatility ranges. This is precisely the moment to be most cautious.

Central Banks, Capital, and Ordinary Investors: Different Positions

Looking at some current data is quite interesting:

The US holds 8,133 tons of gold (75% of its foreign exchange reserves), Germany has 3,350 tons, and China about 2,304 tons. Central banks are buying, private capital is entering, and ultra-rich individuals are positioning early.

What are they doing? They are paying in advance for the worst-case scenario. But note that central banks’ time horizons are different from those of ordinary investors. Central banks can wait 20 years; individual investors cannot.

A deeper observation is that the current gold price performance, to some extent, already reflects expectations for around 2027 and beyond. This is not just trading logic but a strategic layout based on future outlooks.

What to Do in the Face of Historical Patterns

A straightforward piece of advice: Don’t gamble.

No one knows where the top is. Blindly investing is essentially fighting against historical laws. History has already given two answers: gold typically retraces more than 30%, and silver often retraces over 50%. The current market has already clearly exceeded these ranges.

The key point to remember is this: No matter how much you believe in the new narrative of gold, one thing is certain— the faster it rises, the deeper the correction will be in the future.

Markets never owe you a rise. But when you are most confident, they will test your readiness with a retracement.

From $200 to thousands of dollars, those who have learned lessons from history tend to survive longer.