Recently, the surge in gold prices has been a bit uncanny, and many people are wondering whether they should get in. But after looking through historical data, I found that there might be a bigger story behind this rally.

In the cycles over the past few decades, every time gold has skyrocketed, it wasn’t an isolated event. In the cycle from 1971 to 1980, gold prices soared from $40 all the way to $850, coinciding with the global liquidity crunch in 1974. The rally that started in 2001 was even more dramatic, with the 2008 financial crisis pushing prices to new heights. These “coincidences” have happened so many times that they’re not really coincidences anymore.

What’s concerning now is actually the state of the US dollar. While it’s unlikely to see a repeat of the 1970s-style collapse, current policy directions are indeed leaning toward a weaker dollar. Both the crypto and traditional finance circles are paying close attention to this, since it will impact the pricing logic in both markets.

The problem is, the current gold price may have already priced in most of these expectations. There’s an old market saying—when the good news is realized, that’s often the turning point. If the dollar really starts to swing wildly, it could actually trigger profit-taking. What’s worse, if a liquidity crisis hits suddenly, all assets could face selling pressure in the early stages, and gold would be no exception.

To put it bluntly, chasing high prices at this point carries considerable risk. Staying calm when the market is hot is often more important than following the crowd.