Precious metals as hedge and safe haven for African stock markets

Muhammad Abubakr Naeem, Abraham Agyemang, Md Iftekhar Hasan Chowdhury, Mudassar Hasan and Syed Jawad Hussain Shahzad

Resources Policy, 2022, vol. 78, issue C

Abstract: This study investigates the diversification properties of precious metals for African stock markets. We report that gold offers the strongest safe haven and hedging potential for African equity markets. Our quantile-coherency analysis indicates a low safe haven ability of precious metals in the long-run. Palladium provides both safe haven and hedge opportunities in the short-term, while Platinum holds only its hedging potential in the same spectrum. The GFC period provides important revelations; gold joins platinum as a safe haven with silver as a hedge. Our results suggest dynamic diversification opportunities for investors in African equity markets using precious metals more so in the short-term.

Keywords: Precious metals; African stock markets; Quantile coherency; Hedge effectiveness (search for similar items in EconPapers)
JEL-codes: G11 G15 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:78:y:2022:i:c:s030142072200229x

DOI: 10.1016/j.resourpol.2022.102781

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