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World Gold Markets, Istanbul Gold Exchange and Gold Risk Management

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  • Serdar Citak

Abstract

The establishment of Istanbul Gold Exchange (IGE) is the most important stage in the Turkish gold sector restructuring process. IGE has provided a competitive formation in prices and the price differential between Turkey and international markets has been cut dramatically. Today, Turkish investors can buy and sell gold in international prices in the IGE Precious Metals Market. Gold is accepted as a hedge tool against inflation and as a safe haven in economic crisis, world-wide. Gold is the only assets which has negative or close to zero correlation with stocks and bonds/bills, meaning that its price tends to move in the opposite direction from them. Because gold is negatively correlated with stocks and bonds/bills, its inclusion in an investment portfolio leads to a considerable reduction in the volatility of that portfolio. This reduction in volatility in turn improves portfolio performance.

Suggested Citation

  • Serdar Citak, 1999. "World Gold Markets, Istanbul Gold Exchange and Gold Risk Management," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 3(12), pages 51-88.
    • Handle: RePEc:bor:iserev:v:3:y:1999:i:12:p:51-88
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    File URL: http://www.borsaistanbul.com/datum/imkbdergi/EN/ISE_Review_12.pdf
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    Cited by:

    1. Cheng, Wan-Hsiu & Chen, Chun-Da & Lai, Hsiao-Pin, 2020. "Revisiting the roles of gold: Does gold ETF matter?," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).

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