Quick answer
This guide walks through documented past corrections and bear markets, the numbers regulators and index providers actually reported, and what gold prices did during each. Past performance is not a guarantee of future results.
What Is a Correction and How Is It Different From a Bear Market?
Financial industry conventions define these terms by the size of the drawdown from a recent peak in a broad equity index (typically the S&P 500 or Dow Jones Industrial Average):
Pullback: a decline of roughly 5% to 10% from a recent high. Common; several per year on average.
Correction: a decline of 10% or more but less than 20%.
Bear market: a decline of 20% or more from a recent high.
These thresholds are conventions, not regulatory definitions. The FINRA investor education page on market corrections describes the same conventions and notes that corrections have historically occurred, on average, about once every one to two years in U.S. equity indices.
Recovery time (how long it takes an index to return to its prior peak) is separate from the depth of the decline. Some corrections have recovered in weeks; some bear markets have taken years.
Documented U.S. Equity Corrections and Bear Markets
The episodes below are drawn from published S&P 500 index history (S&P Dow Jones Indices) and gold price data from the London Bullion Market Association (LBMA) PM auction. All figures are reported by the index and price providers; they are not projections.
Black Monday (October 1987)
On October 19, 1987, the Dow Jones Industrial Average fell 22.6% in a single trading session, the largest one-day percentage decline in its history. The S&P 500 fell 20.5% that same day. The peak-to-trough decline from the August 1987 high to the October low was roughly 33%. The index returned to its prior August 1987 peak by mid-1989. The Federal Reserve History essay on the 1987 crash documents the sequence and the Fed’s liquidity response.
Gold: the LBMA PM auction closed at $460.10/oz on October 19, 1987 and $486.50/oz on October 20, 1987. The London gold price ended 1987 at $484.10/oz, higher than the $391.75 close at the end of 1986, per LBMA historical data.
Dot-com bear market (March 2000 to October 2002)
The S&P 500 peaked at 1,527.46 on March 24, 2000 and reached an intraday low of 768.63 on October 10, 2002, a drawdown of approximately 49%. The Nasdaq Composite lost roughly 78% peak-to-trough over the same period. The S&P 500 did not close above its March 2000 high until May 2007. Data: S&P Dow Jones Indices historical data.
Gold: the LBMA PM auction closed 2000 at $272.65/oz and closed 2002 at $342.75/oz. The gold price rose during this equity bear market, per LBMA historical data.
Global Financial Crisis (October 2007 to March 2009)
The S&P 500 peaked at 1,565.15 on October 9, 2007 and reached an intraday low of 666.79 on March 6, 2009, a drawdown of approximately 57%. The index returned to its October 2007 peak in March 2013. Context: the National Bureau of Economic Research dated the U.S. recession from December 2007 to June 2009; the Financial Crisis Inquiry Commission report (2011) documents the sequence of institutional failures and government interventions.
Gold: the LBMA PM auction closed 2007 at $836.50/oz, closed 2008 at $869.75/oz, and closed 2009 at $1,087.50/oz. Within the period, gold fell sharply in late 2008 alongside broad forced-liquidation selling (the October 24, 2008 close was $730.75/oz), then recovered. Gold ended 2009 above its 2007 close, per LBMA historical data.
Summer 2011 (U.S. debt-ceiling and eurozone episode)
The S&P 500 declined from an intraday high of 1,370.58 on May 2, 2011 to an intraday low of 1,074.77 on October 4, 2011, approximately 22% intraday and roughly 19% on a closing basis. The period included the August 5, 2011 downgrade of U.S. long-term sovereign debt by S&P from AAA to AA+, documented on the S&P Global Ratings press release archive. The S&P 500 recovered to its prior peak by February 2012.
Gold: the LBMA PM auction closed at $1,895.00/oz on September 5, 2011, the highest LBMA PM close of that year. Gold then declined through year-end, closing 2011 at $1,531.00/oz, per LBMA historical data.
COVID-19 bear market (February to March 2020)
The S&P 500 fell from an intraday high of 3,393.52 on February 19, 2020 to an intraday low of 2,191.86 on March 23, 2020, a drawdown of approximately 34%. This is one of the fastest declines of that magnitude in the index’s history. The index returned to its February 2020 peak by August 2020, aided by fiscal support (CARES Act) and Federal Reserve actions documented on the Federal Reserve’s 2020 COVID-19 monetary policy programs page.
Gold: the LBMA PM auction closed at $1,584.20/oz on February 19, 2020, dipped to $1,474.25/oz on March 19, 2020, then rose to a then-record close of $2,067.15/oz on August 6, 2020, per LBMA historical data.
2022 bear market (January to October 2022)
The S&P 500 closed at an all-time high of 4,796.56 on January 3, 2022 and closed at 3,577.03 on October 12, 2022, a drawdown of approximately 25%. The Nasdaq Composite fell roughly 36% over the same period. Context: the Federal Reserve raised the federal funds target range from 0-0.25% in March 2022 to 4.25-4.50% by December 2022, one of the fastest tightening cycles in decades, documented in the December 2022 FOMC statement. The S&P 500 closed above its January 2022 peak in January 2024.
Gold: the LBMA PM auction closed 2021 at $1,805.85/oz and closed 2022 at $1,812.35/oz. Within 2022, gold traded in a wide range with a March high of $2,039.05/oz and a September low of $1,614.85/oz, per LBMA historical data.
What Does History Show About Gold During Equity Drawdowns?
The documented episodes above show a range of gold behaviors during U.S. equity corrections and bear markets:
1987: gold ended the year higher than it started, small change during the crash itself.
2000-2002: gold rose during the equity bear market.
2007-2009: gold fell during the acute forced-liquidation phase of late 2008, then ended 2009 higher than 2007.
2011: gold reached its then-highest LBMA close in September, then declined into year-end.
2020: gold dipped alongside equities in March, then reached a new all-time closing high in August.
2022: gold traded in a wide range and closed the year roughly flat, despite equities falling ~25%.
These are historical facts, reported by S&P Dow Jones Indices and the LBMA. They are not projections. The World Gold Council publishes ongoing research on gold’s correlation with other asset classes at gold.org/goldhub/research; correlations change over time and across market regimes.
Past performance is not a guarantee of future results. The behavior of gold or any other asset during past equity drawdowns is a factual record, not a forecast. Each episode had its own combination of inflation, interest rates, currency moves, and specific triggering events. Discuss any portfolio decision with a licensed financial advisor.
Why Recovery Time Matters More Than Peak Drawdown
The peak-to-trough decline is one number. Time-to-recovery is a different number and often the one that matters more for a portfolio held over a defined horizon.
Using the closing-price recoveries above:
- 1987 crash: about 20 months to return to the August 1987 peak.
- 2000-2002 dot-com bear: about 7 years for the S&P 500 to return to its March 2000 peak (May 2007).
- 2007-2009 Global Financial Crisis: about 5.5 years for the S&P 500 to return to its October 2007 peak (March 2013).
- 2011 summer decline: about 5 months to recover the May 2011 peak.
- 2020 COVID decline: about 5 months to recover the February 2020 peak.
- 2022 bear market: about 24 months to recover the January 2022 peak (January 2024).
These recovery times are the closing-index recoveries, not the total-return recoveries. On a total-return basis (dividends reinvested), the S&P 500 recovered somewhat faster in each episode. The FINRA and S&P Dow Jones Indices sources cited in the sources section include both series.
What a Correction Is Not a Signal For
A market correction is a description of what has happened in an index over a defined window. It is not, on its own, a signal for any of the following:
- Whether the decline will continue or reverse. Future direction is not knowable in advance.
- What any specific investor should do with their portfolio. That depends on age, goals, time horizon, tax situation, other holdings, and personal risk tolerance, all of which require a licensed financial advisor.
- Whether any particular asset class will outperform another. Correlations change across market regimes.
- Whether to open a gold IRA, precious metals account, or any other product. Product decisions depend on the same personal factors above, plus product-specific costs and eligibility documented in IRS Publication 590-A and Publication 590-B.
How Goldiew Tracks Prices and Sources
Goldiew publishes live spot prices for gold and silver, updated at the frequency permitted by our data provider. The current gold price is $4,356.04/oz (updated 2 hours ago). Historical LBMA close data for specific dates is available directly from the LBMA precious metals prices archive.
For the S&P 500, index history and drawdown data are published by S&P Dow Jones Indices. FINRA’s investor education pages cover the definitions of pullback, correction, and bear market in plain English.
Related Goldiew coverage on how metals are priced and tracked:
- Gold record price: what it actually means
- What a Fed rate decision means for gold
- Bank failures and your money: what actually happens
- Gold spot price history over 30 years
- What is the gold spot price and how is it set
- Capital gains on physical gold and silver (28% collectibles rate)
FAQ
How often has the S&P 500 had a correction?
Per FINRA’s investor education material and S&P Dow Jones Indices historical data, declines of 10% or more from a recent peak have occurred, on average, about once every one to two years in the S&P 500 since 1950. Bear markets (declines of 20% or more) have been less frequent, occurring roughly once per decade on average.
Does gold always rise when stocks fall?
No. The documented episodes above include cases where gold fell alongside equities (late 2008), rose while equities fell (2000-2002), and moved sideways (2022). Correlations vary across market regimes. This is what the historical record shows; it is not a forecast.
What is the difference between a correction and a bear market?
By industry convention, a correction is a decline of 10% or more but less than 20% from a recent peak. A bear market is a decline of 20% or more. These are conventions used by financial media and index providers, not legal definitions.
How long do corrections typically last?
Historical duration varies widely. Some corrections have recovered within weeks (the 1998 LTCM-era decline recovered in about 3 months; the 2018 fourth-quarter decline recovered within 4 months). Deeper drawdowns and bear markets have taken years. Each episode is different.
Should I move my portfolio into gold during a correction?
Goldiew does not give portfolio advice. Whether any asset allocation change makes sense depends on your age, goals, time horizon, tax situation, and other holdings. That analysis is the role of a licensed financial advisor. Our role is to document facts about products, prices, and companies in the precious metals space.
What did gold do around the 2020 COVID crash?
Per LBMA PM auction data, the London gold close was $1,584.20/oz on February 19, 2020 (the S&P 500 peak day), dipped to $1,474.25/oz on March 19, 2020 during the forced-liquidation phase, then rose to a then-record close of $2,067.15/oz on August 6, 2020. These are historical facts, not a forecast for any future episode.
Sources and Methodology
- S&P 500 historical index levels: S&P Dow Jones Indices, S&P 500 overview and historical data.
- Definitions of correction and bear market: FINRA investor insights: What is a market correction?
- 1987 crash context: Federal Reserve History: Stock Market Crash of 1987.
- 2007-2009 crisis: Financial Crisis Inquiry Commission report (2011); NBER business cycle dates.
- 2011 sovereign downgrade: S&P Global Ratings press release archive.
- 2020 policy response: Federal Reserve 2020 COVID-19 monetary policy programs.
- 2022 tightening cycle: December 2022 FOMC statement.
- Gold prices: LBMA Precious Metal Prices archive.
- Gold research: World Gold Council Goldhub research.
- Retirement account rules: IRS Publication 590-A and IRS Publication 590-B.
All price and index figures above are reported by the index provider (S&P Dow Jones Indices) and the price provider (LBMA) for the specific dates cited. Past performance is not a guarantee of future results. Consult a licensed financial and tax advisor for decisions specific to your situation.