The comments above & below are edited ([ ]) and abridged (?) excerpts from the original article written by Carl Swenlin (decisionpoint.com)

Performance of S&P 500 and Gold During Gulf War

As we can see [in the chart below], stocks behaved in a predictable way - crashing when Iraq invaded Kuwait in August, then rallying within hours of the initial bombing in January, when it became obvious that the worst fears were unfounded.

(Click on graphs for a clearer picture)

Gold, on the other hand, [as can be seen in the chart above,] rallied when Kuwait was invaded, but then it began to meander in a wide range, ending with a final rally just before the Coalition attack began. Once the outcome of the war was known (almost immediately), gold resumed normal trading. One might have assumed that gold would rally continuously during the period of uncertainty, but one would have been wrong.

Performance of S&P 500 and Gold During Global Financial Crisis of 2007

[As can be seen in the chart below,] stocks declined for over a year until making a bear market low in early 2009.

(Click on graphs for a clearer picture)

Gold, on the other hand, [as can be seen in the chart above,] rose over 300 dollars from 2007 to early 2008. Then it began a wide-ranging decline into late 2008, during which it lost almost all its initial gains. One might have thought that gold would have maintained a steady climb during the entire period of the crisis, but, again, one would have been wrong.

After the low in 2008, gold began a steady rally that ultimately took the price to over 1900, so from that point of view, gold was a big winner in the face of the financial crisis. However, the 30% correction in 2008 had to have been a period of major confusion and high anxiety for those who thought their investment in gold was supposed to protect them from the fallout of the financial crisis.

Conclusion

We can devise logical scenarios as to what the price of gold should or should not do, but gold doesn't always follow the plan. To paraphrase an old Jewish saying: "Man plans. Gold laughs."…

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