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Flight to quality – Gold mining shares versus gold bullion

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  • Baur, Dirk G.
  • Prange, Philipp
  • Schweikert, Karsten

Abstract

This paper uses a large sample of gold mining companies traded on four stock markets to identify different types of flight to gold. After extreme financial shocks, we observe that investors flee from stocks including gold mining shares to gold bullion. However, if the financial shock is less extreme, investors only flee from stocks excluding gold mining shares. This highlights that the study of gold mining companies provides important additional information in the context of flight to quality and safe haven effects.

Suggested Citation

  • Baur, Dirk G. & Prange, Philipp & Schweikert, Karsten, 2021. "Flight to quality – Gold mining shares versus gold bullion," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:intfin:v:71:y:2021:i:c:s1042443121000159
    DOI: 10.1016/j.intfin.2021.101296
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    2. Bentes, Sónia R., 2022. "On the stylized facts of precious metals’ volatility: A comparative analysis of pre- and during COVID-19 crisis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 600(C).

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    More about this item

    Keywords

    Gold; Safe haven; Flight to quality; Gold mining; Financial shocks;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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