Markets · Correlation
Gold did the 1970s job. Not 2008’s. Not 2022’s.
X is Damodaran’s S&P. Y is his gold. 1973–74 sit in the upper-left, +73% then +66% while stocks fell. 2022 is −18% equities and +0.55% gold — a hedge that did not show up. 2025’s +66% is a bull year, not a crash.
- Gold, Damodaran, calendar 2022
- +0.55%
- Gold, 1973
- +73%
- Gold, 1974 — and 2025
- +66%
- Gold, 2008
- +4.3%
Upper-left is 1974. Origin-left is 2022.
A crash hedge that works sits up and left: equities down, the hedge up. 1973 and 1974 are that picture — Damodaran’s gold +73%, then +66%, while the S&P printed −14% and −26%. 2008 is a different upper-left on the other wall (Treasuries). On this wall gold is +4.3%, a shrug. 2022 is the failure of both stories: S&P −18%, gold +0.55%, and the 10-year −18% as the large disc. Size here is |Treasury return|. 2022 is large because bonds fell. 2008 is large because they rose.
2025’s +66% is not 1974
Damodaran’s 2025 gold print is +66.22%, the twin of 1974’s number. The S&P that year was +17.8%. It is a bull-market gold year, the one that follows a decade of official buying and a 3% Japanese 10-year, not an oil-embargo crash. Pair with Three thousand four hundred: the year-average is a price, not a hedge coefficient. Treating 2025 as proof that gold ‘works in crashes’ is how you mis-read this scatter.
The long view is two hedges, two tapes
Size gold for a 1970s inflation tape, outside the 60/40. Size Treasuries for a 2008 demand tape, as a sleeve not as the whole 40%. What would change this page: a Damodaran year with stocks down double-digits and gold up 50% again. 2022 was not that year. 2025 was not a crash.
Investing lens
Horizon 5–20 years · Educational, not advice
Gold is 1970s insurance. It is not 2008 insurance and it was not 2022 insurance. Allocate it for the tape it actually pays on.
Where the map points
- Allocated bullion as a named inflation sleeve, not as the 40%
- Do not let 2025’s +66% rewrite 2022’s +0.55%
- Treasuries remain the 2008 hedge, sized separately
- Avoid miners as a substitute for the metal in a crash study
What can break it
- A 2008 rerun that makes gold look late
- A 1974 rerun that makes a 60/40 look unfinished
- Confusing a bull-year gold print with a crash coefficient
CHART does not recommend securities, funds or trades. Figures can be revised by their publishers. Do your own research and consider regulated advice before allocating capital.
Sources
Every headline number traces to a named publisher. Contextual sources inform the essay, not the key stat.
- 01PrimaryAswath Damodaran, NYU Stern2026-01Historical Returns on Stocks, Bonds and Bills: 1928–2025
Calendar total returns. 2022: S&P −18.04%, 10-year Treasuries −17.83%, T-bills +2.09%, Baa −15.23%, gold +0.55%, real estate +5.65%. 2008: S&P −36.55%, 10-year +20.10%, gold +4.32%. 2025: S&P +17.78%, 10-year +7.80%, gold +66.22%.
- 02PrimaryHartford Funds / Ned Davis Research2025-0310 Things You Should Know About Bear Markets
S&P 500 close-to-close declines of 20% or more, 1929–2024. As of 31 Mar 2025. Average −35% across 20% episodes. Cycle depths (1929 −86%, 2008 −57%) are a different ruler, used on our crash bubble.
- 03PrimaryWorld Gold Council2026-01-29Gold Demand Trends: Q4 and Full Year 2025
LBMA (PM) annual average 2025 $3,431.5/oz (+44% vs $2,386.2 in 2024). 53 record highs. Q4 average $4,135.2. Total demand 4,999.4 t; jewellery fabrication 1,638 t; bar and coin 1,374.1 t; ETFs 801.2 t; official 863.3 t.
Keep reading
The year stocks and bonds occupied the same quadrant
Each bubble is a calendar year. X is Damodaran’s S&P total return. Y is his 10-year Treasury. Size is gold. 2008 is the upper-left hedge. 2022 sits on the 45-degree line, both down 18%.
−18.0 / −17.8
S&P and 10-year Treasuries, 2022
The 45-degree line is a 60/40 that did no work
X is Damodaran’s S&P calendar return. Y is 60% that S&P and 40% his 10-year. The dashed line is Y = X: the mix is the stock. 2008 sits far above it. 2022 sits on it.
0.08 pt
2022 60/40 vs 100% S&P
The same six assets. Two crashes. One of them changed jobs.
X is Damodaran’s 2008 calendar return. Y is 2022. Size is how far the job changed. Treasuries are the outlier: +20% in the GFC, −18% in the rate shock. The S&P just fell twice.
+20 → −18
10-year Treasuries, 2008 then 2022
Gold’s year averaged $3,431. Two years earlier it was $1,800.
World Gold Council: LBMA annual average $1,800 in 2022, $2,386 in 2024, $3,431 in 2025 — up 44%, with 53 record highs. Q2 2026 printed $4,506. That is a quarter. It is not a year.
$3,431
LBMA annual average, 2025 (WGC)
A thousand tonnes a year, on purpose
Central banks bought 863 tonnes of gold in 2025. That is a ‘slow’ year. 2022–24 each cleared 1,000 tonnes. The pre-2022 average was about 470. This is the official sector rewiring the reserve stack.
863 t
Official-sector gold buying, 2025