Most of us know that there's a common concept that the stock market index and gold price have an inverse relation or negative correlation. When the index moves downwards, the gold price often increases. And the common explanation to this is that people find gold to be safer than the stocks in the crisis period.
But my question: Why should people sell stocks at low prices and buy gold at a high price?
Shouldn't they buy gold early in time and sell gold during the crisis period since the price is high at that time or invest in a bank as a fixed deposit?
If they purchase gold at a high price, they can't ever sell keeping a profit since the price will go down when the market goes up at a later time. So where's the wisdom?