Reevaluating the Time-varying Safe Haven Status of Precious Metals: Novel Insights from Economic Policy Uncertainties in the USA and China
Reevaluating the Time-varying Safe Haven Status of Precious Metals: Novel Insights from Economic Policy Uncertainties in the USA and China
Author(s): Ahmet TunçSubject(s): Supranational / Global Economy, Micro-Economics, Economic history, Political economy, Financial Markets, Socio-Economic Research
Published by: Vysoká škola ekonomická v Praze
Keywords: Precious metals; economic uncertainty; Granger causality; time-varying parameters; COVID-19;
Summary/Abstract: This study examines whether price exuberances in four main precious metals (gold, silver, platinum, palladium) stem from their safe haven status against economic uncertainty (using US EPU and Chinese CEPU indices). Findings show that both uncertainty measures affect gold and silver prices, more so with CEPU, persisting longer, especially during the COVID-19 pandemic. This highlights their safe-haven status, with CEPU dominance. However, price exuberances in gold and silver align more with supply/demand imbalances, suggesting safe havens aren't the sole driver. The EPU's effect on platinum and palladium is pronounced during economic turmoil, while the CEPU's effect is linked to price exuberances. The study concludes that the safe-haven status of precious metals is dynamic, and price exuberances don't consistently originate from it.
Journal: Politická ekonomie
- Issue Year: 72/2024
- Issue No: 6
- Page Range: 958-984
- Page Count: 27
- Language: English
