Can Precious Metals Act as Safe-Haven or Hedge Assets in Capital Markets of China?

Ewa Feder-Sempach, Piotr Szczepocki and Joanna Bogołębska

Chinese Economy, 2026, vol. 59, issue 2, 141-159

Abstract: The main objective of the article is to examine the role of four precious metals, gold, silver, platinum, and palladium, as potential safe havens and hedgers for investors trading on the main Chinese Stock Exchanges during the period 2014–2023. We apply the regression model with dummy variables to capture extreme stock market movements with residual term modeled as a GARCH process if heteroskedasticity exists. The main findings show that precious metals can play the role of safe-haven and hedge assets, but to a different extent. Gold seems to work as the best hedge and safe haven for all Chinese markets, in contrast to silver and platinum. Palladium can also serve as a safe haven, but only for Shenzhen investors. Gold is the best safe-haven and hedge, as it is perceived as a financial asset that performs monetary functions. The novelty of the research lies in investigating the safe-haven and hedge effect in different currencies and quarter-by-quarter manner.

Date: 2026
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DOI: 10.1080/10971475.2025.2529647

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