Gold is widely seen as a safe haven. Is this true? Here’s how gold has performed during equities bear markets and economic recessions.
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Gold during equities bear markets
As you can see, gold tends to do ok during a S&P 500 bear market (-40% decline, lasting 1 year or more). However, the sample size here is small, so take this with a dose of caution.
*Gold soared during the 1973 – 1974 equities bear market because it was coming out from multi-decade commodity price controls.
Gold during economic recessions
As you can see, gold tends to do ok during economic recessions. However, the sample size here is small, so take this with a dose of caution. Gold experiences plenty of volatility during economic recessions, and often goes negative.
Should you buy gold during a recession or equities bear market?
It’s up to you.
The answer is not conclusive, as the data demonstrates.