For investors fearing a stock market rout, the collapse of banks or other financial institutions, or runaway inflation, gold has always been viewed as a safe haven.
In recent years many of the most popular investment funds have built their exposure to gold. But has it worked?
Telegraph Money has crunched the numbers to find out, using data service FE Analytics. We have created model portfolios in which gold makes up varying proportions of the total and then looked back at their performance over a number of timescales.
The shares element of the portfolio is represented by the FTSE World Index of leading global shares. the portfolio is rebalanced each year back to the percentages outlined below.
- 95pc shares, 5pc gold
- 90pc shares, 10pc gold
- 80pc shares, 20pc gold
- 50pc shares, 50pc gold
Over the long term it has paid to be gold. Investors typically buy gold in the hope that it will rise in value when stock markets fall, when panic sets in, or when inflation heads up.
Gold maintained its price during the technology-fueld staock market collapse of 2000-2003, and then gained further during Iraq war and in response to corporate scandals such as energy giant Enron's collapse. It soared ahead of the FTSE World index when the global financial crisis hit, and posted its biggest gains in the nervy years that followed.