How does gold perform during stock market crashes [Infographic]
Gold has long been viewed as the “safe-haven asset” - one that can protect investors against the ravages of stock market crashes.
But does gold’s safe-haven reputation still hold up? Can gold actually protect your portfolio from a tumbling stock market? We turned to the data for an answer.
The above infographic shows the 10 biggest declines in the S&P 500 since 1970 and compares them with gold price movements during the same time. We used nominal data from Macrotrends and the World Gold Council.
Gold Prices vs S&P 500 Declines
Stock market crashes, unfortunately, are inevitable and many market analysts today are predicting severe, perhaps historic, market declines in the months and years ahead.
Is diversifying your portfolio with gold, as some suggest, a smart strategy to bolster your portfolio against the economic turmoil of a stock market crash?
The data clearly shows that gold has significantly gained in value during most of the crashes since 1970. In fact, during the worst crash of the past 50 years, October 2007 - March 2009, gold gained 28 percent while the S&P 500 declined by 57 percent! This alone is a shining example of the potential of gold as a hedge against significant market declines.
Gold’s best performances occurred during the two large S&P 500 market declines of the 1970s, with huge price increases of 137% and 55%.
There were 3 instances where the price of gold declined along with the S&P 500. Even here, however, gold significantly outperformed the S&P 500 in 2 out of the 3 stock market crashes.
The anomaly was the 1980 - 1982 bear market where gold prices declined 46% versus S&P 500’s decline of 27%. This occurred just after the largest gold bull market in modern history where the yellow metal skyrocketed 2,300 percent from its low in 1970.
Looking at the averages of the 10 market declines, however, further affirms gold’s status as a safe-haven asset that can protect your investment portfolio from the perils of a falling stock market. While the S&P 500 declined an average of 33%, gold increased an average of 19%.
Diversifying with gold?
As the data above shows, gold has historically earned its safe-haven reputation — not just as a theoretical hedge, but as a demonstrably effective one during the market downturns that matter most.
For investors looking to add gold to their portfolio in a tax-advantaged way, a Gold IRA is one of the most effective options available. Like a traditional IRA, a Gold IRA offers significant tax benefits — but instead of holding paper assets, you hold physical gold stored in an IRS-approved secure depository.
Choosing the right Gold IRA provider matters. Fees, storage arrangements, and reputation vary significantly across companies, and the wrong choice can quietly erode the very returns you're trying to protect.
To help you navigate the options, we've put together a list of the Top 5 Best Gold IRAs — vetted for reputation, transparency, and value. If you're serious about protecting your portfolio with physical gold, this is the right place to start.
