(FORTUNE Magazine) – Gold is golden when turmoil brews, or so the adage goes. With oil prices up, and stocks, bonds, and the dollar behaving as so many falling leaves in a draft, you would expect individuals to be flocking to the metal as a safe haven. After all, although gold doesn't pay interest or dividends, it does have a remarkable history of preserving its value, unlike its paper-and-faith alternatives. Yet in the wake of the Iraqi invasion of Kuwait, the commodity has not maintained even a 10% increase in price. Is gold still the crisis investment of choice? History provides some clues. Since 1968, when individuals, excluding Americans, could first legally buy bullion at a free-market price, gold has had four major bull markets (see chart). In each of those, politics, economics, and simple facts of supply and demand played important roles, as they do today. But subtle changes in the way those factors interact could result in a surprisingly different behavior from the yellow metal in the months ahead. Investors looking to profit from gold, or simply to protect their wealth, may have to play it differently this time around. The first two bull markets were driven by the oil quotient. In 1974 oil prices leaped from $4 to $13 a barrel, and the eight-year ''inflation era'' began. Political turmoil, in the form of an Arab oil embargo, played a part in gold's rise. So too did supply and demand: International gold bugs were betting that a 1974 legislative change, which finally allowed Americans to own gold, would result in a surge in demand. The bull market collapsed when the expected buying failed to materialize. Gold's biggest bull run occurred in 1979. It culminated on January 21, 1980, when gold hit an astounding $850 per ounce, virtually double the price of just one month prior. That spike was driven largely by investor fears of a superpower clash over the Soviet Union's invasion of Afghanistan. Added thrust came from OPEC, which tripled oil prices from $13 to $39 per barrel. Gold's gushes in the 1980s were ignited by dollar dips and worries over possible gold shortages, not political or oil shocks. The 1982 rise was triggered by Mexico's debt default, creating fears that a Third World debt crisis would be countered by loose money and wild inflation. The most recent rise, between 1985 and 1987, was fueled by a weak dollar and a hard-charging U.S. economy, both potentially inflationary. There were also worries that South African production problems would affect the supply. As icing, gold topped $500 when Black Monday sent investors scurrying from stocks. SO FAR, today's gold market combines elements of the past but lacks key ingredients for a ripsnorting run. Like the Seventies' swings, gold has reacted favorably to world unrest and threats of inflation brought on by steeper oil prices. But unlike earlier crises, the U.S.-Iraq confrontation does not portend a superpower battle. Nor will it drive inflation skyward as did the oil shocks of the Seventies. Even if crude prices rose to $40, the annual rise in the consumer price index would be less than half the 13.5% it hit in 1980. Says Bruce Kaplan, president of the precious-metals consulting firm Kaplan & Co. in Santa Monica, California: ''If inflation were to rise to 7% or more, that would be a major flag to buy gold. Anything between 5% and 6% is simply not going to do much for gold prices.'' Further damping gold's prospects is a department store of alternatives for investors seeking to protect their wealth. The easy availability of foreign currencies has stolen some of gold's crisis customers, and rushes to gold- mining stocks and options have sapped part of the metal's strength on the commodity exchange. Individuals can also achieve supersafe returns on investments in government money market funds that provide more than glitter. < So where will customers come from to power a meaningful advance to, say, $450 or $500 an ounce? Individuals worldwide haven't embraced gold since they left it en masse on recession fears in 1988, sending bullion and coin purchases tumbling 71%. Says Kaplan: ''Anything short of an all-out Middle East conflict won't be enough to stir an investor-driven bull market in gold.'' For investors still intent on protecting themselves with gold, there may be better ways to go than bullion. James Kneafsey, president of Cambridge Financial Management, an institutional investment firm, ranks gold-mining stocks first, followed by gold options, then futures, and finally coins and bullion. Gold stocks typically move at twice the rate of change in the metal's price, notes Kneafsey. When gold jumped 15% from mid-July to mid-August, gold stocks leaped some 32%. The downside is that gold stocks also fall twice as fast. Even in the realm of safe havens, there's no free lunch.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: A BULL THAT LOVES BAD NEWS Since gold began trading freely in 1968, its price has taken off, as the major monthly moves depicted here show. Daily prices of bullion, shown above at Citibank's New York vault, have shot even higher, to $850 per ounce in 1980.