During the 1997–1998 Asian Financial Crisis, gold did not perform as a traditional safe haven in the way many might expect. Here's a detailed look:


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Gold Price Movement During the Asian Financial Crisis:

1. Timeframe:

The Asian Financial Crisis started in July 1997 and continued through 1998.

The most acute financial panic occurred from mid-1997 to late 1998.


2. Gold Price Trends (USD/oz):

Mid-1997: Around $340–350/oz.

August 1998 (Russia Default, LTCM crisis): Gold dipped to around $280–290/oz.

Bottom in 1999: Around $252/oz (specifically in July 1999).


3. Price Correction:

From ~$350/oz in 1997 to ~$252/oz in 1999.

Total correction: Around -28% from peak to trough.

Bearish duration: Roughly 2 years (mid-1997 to mid-1999).



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Contextual Notes:

Gold's decline was surprising because crises often boost demand for safe havens.

However, during this period:

The US dollar strengthened significantly.

Interest rates were relatively high in the U.S., attracting capital inflow.

Many Asian central banks sold gold reserves to support their currencies.

The global macro trend was deflationary, also pressuring gold prices.


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