Is Gold a Hedge and Safe Haven during Political Uncertainties?

Business & Economic Review Pub Date : 2021-06-15 DOI:10.22547/ber/13.2.1

Hafsa Rasheed, H. Ahmad, A. Y. Javid

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引用次数: 5

Abstract

Technological advancements not only bolstered almost all activities, but also accelerated the spread of information in blinks. Thus, announcements about market volatilities along with subpar financial instruments’ performance have led investors to search for alternative assets to cope with amplified uncertainties. Investors in politically unstable economies, like Pakistan, are more prone to the risks of uncertainties so require some safe investments. Previously gold has been investigated as a hedge and safe haven during various economic and market conditions but literature lacks investigation of gold during political uncertainties. So by investigating the role of gold as a hedge and safe haven during political uncertainties against sectors of Pakistan Stock Exchange (PSX), the current study not only contributes to literature, but also contributes to the knowledge of Pakistani investors and asset managers that whether they should consider gold as a diversifier or not. The study incorporates daily gold prices (gold bullion Pkr. per Tola), daily stock prices of PSX sectors and political events of Pakistan for a time span of 2009 to 2019. Appling EGARCH with quantile dummies and event dummies, findings indicate that gold acts as a hedge and safe haven against the stock market and most of its sectors in normal as well as politically uncertain situations. Thus, Pakistani investors must consider gold in asset allocation strategies for having an optimal portfolio that can cope with the risk of acute market conditions and political uncertainties. Finings of current study facilitate Pakistani investors, investment advisors and asset managers to make healthy investment decisions and enjoying the benefits of diversification through inclusion of gold in their portfolios.

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黄金是政治不确定性时期的对冲和避险工具吗?

技术进步不仅支持了几乎所有的活动，而且加速了信息在眨眼之间的传播。因此，有关市场波动和金融工具表现不佳的公告，导致投资者寻找替代资产，以应对不断扩大的不确定性。在巴基斯坦等政治不稳定的经济体，投资者更容易受到不确定性的风险，因此需要一些安全的投资。此前，黄金曾被研究为各种经济和市场条件下的对冲和避险工具，但文献中缺乏对政治不确定性时期黄金的研究。因此，通过调查黄金在巴基斯坦证券交易所(PSX)部门政治不确定性期间作为对冲和避险的作用，当前的研究不仅有助于文献，而且有助于巴基斯坦投资者和资产管理公司了解他们是否应该将黄金视为多元化投资工具。该研究纳入了每日黄金价格(金条Pkr)。根据Tola)， 2009年至2019年期间巴基斯坦PSX行业的每日股价和政治事件。将EGARCH与分位数假人和事件假人一起应用，结果表明，在正常以及政治不确定的情况下，黄金作为对冲和避险股市及其大多数行业的避风港。因此，巴基斯坦投资者必须在资产配置策略中考虑黄金，以获得一个能够应对严峻市场状况和政治不确定性风险的最佳投资组合。本研究的结论有助于巴基斯坦投资者、投资顾问和资产管理人员做出健康的投资决策，并通过将黄金纳入其投资组合而享受多样化的好处。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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Business & Economic Review

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