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Is gold always a safe haven?

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  • Ryan, Michael
  • Corbet, Shaen
  • Oxley, Les

Abstract

This study reexamines the long-held view of gold as a universal safe haven during stock market downturns. Utilising a dataset from 1979 to 2020, we investigate the conditional nature of gold’s safe-haven status with the S&P 500 index, revealing that the specific drivers of market declines determine the extent of gold’s safe-haven status. Notably, gold’s protective efficacy is pronounced during downturns specifically triggered by macroeconomic news but less evident in downturns triggered by other reasons. Our result challenges traditional perceptions and suggests investors adopt a contextual approach to identifying safe haven assets.

Suggested Citation

  • Ryan, Michael & Corbet, Shaen & Oxley, Les, 2024. "Is gold always a safe haven?," Finance Research Letters, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:finlet:v:64:y:2024:i:c:s1544612324004689
    DOI: 10.1016/j.frl.2024.105438
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    References listed on IDEAS

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    Cited by:

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    2. Baur, Dirk G. & Dimpfl, Thomas & Pena, Javier, 2025. "A Safe Haven Index," Finance Research Letters, Elsevier, vol. 85(PB).
    3. Urszula Gieraltowska & Andrzej Rzeczycki, 2025. "Can Bitcoin Replace Gold in an Investment Portfolio in the Polish Capital Market?," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 1587-1608.
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    9. Faraj, Hussain & McMillan, David & Al-Sabah, Mariam, 2025. "The diminishing lustre: Gold's market volatility and the fading safe haven effect," Global Finance Journal, Elsevier, vol. 67(C).
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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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