What happens to gold when the stock market crashes? Gold often holds up better than stocks during a stock market crash, but it does not automatically rise. Investors may buy it as a safe haven when their confidence in financial markets weakens which increases its price.
However, gold can also fall during the initial panic. Investors sometimes sell it to raise cash, cover stock market losses, or meet demands for additional collateral on borrowed investments. This happened during the 2008 financial crisis and the March 2020 market selloff.
Gold may recover as forced selling eases and demand for safety grows, but the timing and size of any rebound are uncertain. It can help diversify a portfolio, but it is not a guaranteed shield against losses or an investment that always moves opposite stocks.