Explanatory mining for gold: Contrasting evidence from simple and multiple regressions

Dirk Baur ()

Resources Policy, 2011, vol. 36, issue 3, 265-275

Abstract: Gold traditionally has been used as a store of value and an inflation hedge. More recently, gold is also viewed as a hedge against uncertainty and a safe haven. This paper demonstrates that many properties regularly associated with gold are only valid in a simple regression framework but significantly change in a multiple regression framework. A descriptive and econometric analysis of gold and US economic and financial variables for monthly data from 1979 to 2011 shows that gold primarily serves as a hedge against a weaker US dollar and against higher commodity prices. In contrast, gold is not a hedge against consumer price inflation. The empirical results also indicate that gold only recently evolved as a safe haven asset.

Keywords: Gold; Store; of; value; Inflation; hedge; Exchange; rate; Safe; haven; Uncertainty; Cost; of; carry (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:36:y:2011:i:3:p:265-275

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