 Revisiting the roles of gold: Does gold ETF matter?Wan-Hsiu Cheng, Chun-Da Chen and Hsiao-Pin Lai The North American Journal of Economics and Finance, 2020, vol. 54, issue C Abstract: This study investigates whether the role of gold changes due to the introduction of gold exchange-traded funds (ETFs) using sample data of seven countries in which physically-backed gold ETFs have been issued. The results show that the traditional roles of gold do change after the introduction of gold ETFs, particularly in the corresponding stock markets. The functions of hedge and safe haven provided by gold wear off during the post-ETF period in stock markets. In currency markets, however, gold still serves as a hedge and safe haven asset, and such effects become stronger during the post-ETF period. Moreover, gold ETFs play a role of relative strong safe haven than the physical gold does while the leading (lagged) stock returns extremely decline. Like the purposes of using physical gold assets, gold ETFs also provide hedge and safe haven effects to the exchange rate risks. Therefore, we might confirm that physical gold could be largely replaced by gold ETFs and investors could utilize gold ETFs to avoid potential risks in financial markets. Keywords: Hedging; Safe haven; Gold; Gold ETF (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:54:y:2020:i:c:s1062940818302407 DOI: 10.1016/j.najef.2018.12.003 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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