Gold bubbles: When are they most likely to occur?

•Assess when gold bubbles are most likely to occur.•Use Phillips et al. (2012, 2013) tests to identify bubbles.•The occurrence of gold bubbles is influenced by investors' “flight to safety”.•Gold plays a special role as a refuge in times of economic recession.•A gold bubble may arise by expansionary monetary policy to stimulate the economy.

We assess when gold bubbles are most likely to occur. This question is particularly important since the price of gold fluctuates rapidly during the financial crisis of 2007-2012. We use Phillips et al. (2012, 2013) tests to identify bubbles in the gold market since the breakdown of the Bretton Woods System. Five periods of bubbles are identified. We argue that the occurrence of gold bubbles is influenced by investors' “flight to safety” during financial crises. If global central banks implement expansionary monetary policy to stimulate the economy, a gold bubble may arise.