The Role of Gold as a Hedge or Safe Haven in African Stock Markets during the COVID-19 Pandemic

This study seeks to investigate the role of gold as a hedge or safe haven against African stock movements during the COVID-19 pandemic by using a two-state Markov Regime-Switching approach. The findings suggest that gold serves as a weak hedge in Malawi, Morocco, Nigeria, Tunisia, and Zambia, a weak...

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Bibliographic Details
Published inManagement and Economics Review Vol. 8; no. 3; pp. 368 - 386
Main Authors Kunjal, Damien, NAIDU, Delane Deborah
Format Journal Article
LanguageEnglish
Published EDITURA ASE 31.10.2023
ASE Publishing House
Editura ASE
Subjects
covid-19
Economy
Financial Markets
gold
hedge
safe haven
Socio-Economic Research
stock market
gold
Safe Haven
stock market
COVID19
hedge
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Summary:This study seeks to investigate the role of gold as a hedge or safe haven against African stock movements during the COVID-19 pandemic by using a two-state Markov Regime-Switching approach. The findings suggest that gold serves as a weak hedge in Malawi, Morocco, Nigeria, Tunisia, and Zambia, a weak safe haven in Ghana, Kenya, Mauritius, Rwanda, Uganda, and Zimbabwe, and a strong safe haven in Botswana and Tanzania. Furthermore, the findings reveal that gold co-moves with the South African stock market regardless of the market regime. These findings imply that, on average, gold offers limited protection for African equity investors.
ISSN:2501-885X
2501-885X
DOI:10.24818/mer/2023.10-09