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You can't eat it or sleep in it. It won't help sell cars, clean up the environment, or get the credit markets flowing again.

But throughout history, gold has shone as a safe haven of choice for everyone from skittish governments to grandmothers safeguarding their retirement savings.

It's also an asset class that evokes enormous passion from investors. On one hand there are the gold bugs, those who believe the yellow metal amounts to a life preserver in the rising floodwaters of economic turmoil. Then there are the bears who think gold has had its day, and that in the current economic crisis cash will be king.

Even the data regarding how well gold has lived up to its billing as a safe harbour in past recessions can be interpreted in different ways.

During 11 recessions, from 1945 through 2001, the average total return of gold has been just under 5 per cent including transaction costs, according to data compiled by market forecasting firm Elliott Wave International.

The median return was -4 per cent, and over all, both gold and the Dow were outperformed by 10-year U.S. Treasury notes, the report said.

(It is worth noting that during the earlier of those downturns, the gold price was fixed and the U.S. dollar backed by gold, meaning it was a cash-equivalent.) However, for those who prefer to own hard assets in a downturn, physical gold has outperformed gold stocks, along with shares of companies in many other sectors, during bear markets.

The value of physical gold has trounced the return on the S&P 500, and handily beat that of gold mining shares, during many stock market declines of 15 per cent or more, according to data excerpted from a report by Sam Stovall, chief investment strategist at Standard & Poor's.

Following is a question-and-answer with Robert R. Prechter, author of Conquer the Crash. Why has gold been seen historically as a safe haven, and who has used it as such? Has it really been one?

Gold has been a safe haven in times of utter monetary breakdown, but not in other hard times. Contrary to myth, since gold was freed in 1970, it has not been a very good investment on average during economic contractions. It has performed far better during economic expansions. In 2008, I did a study that shows this point clearly. That's why I was not surprised to see gold and silver peak in March, shortly after the economy stopped expanding and the recession began.

How has it performed versus other asset classes, for example, over an extended period of time?

Gold has underperformed just about every investment. You can make gold look good by choosing the dates of lows in gold to do your measuring, but not otherwise. Gold is money. It does not benefit from production, as stock shares do, or from compound interest, as bonds do.

Thus far, is it maintaining this status in the current financial market turmoil, if not, why not, if so, is this expected to continue and/or strengthen?

Gold has been quite stable, rising less than many other commodities from 1999 to 2008 and falling less since the highs. I expect it to continue falling less than other commodities. But during deflations, such as we have now, cash is usually the best thing to have. This time, the fiat monetary system is at risk, though, so I have advocated holding some gold.