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Precious metals as hedge and safe haven for African stock markets

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  • Naeem, Muhammad Abubakr
  • Agyemang, Abraham
  • Hasan Chowdhury, Md Iftekhar
  • Hasan, Mudassar
  • Shahzad, Syed Jawad Hussain

Abstract

This study investigates the diversification properties of precious metals for African stock markets. We report that gold offers the strongest safe haven and hedging potential for African equity markets. Our quantile-coherency analysis indicates a low safe haven ability of precious metals in the long-run. Palladium provides both safe haven and hedge opportunities in the short-term, while Platinum holds only its hedging potential in the same spectrum. The GFC period provides important revelations; gold joins platinum as a safe haven with silver as a hedge. Our results suggest dynamic diversification opportunities for investors in African equity markets using precious metals more so in the short-term.

Suggested Citation

  • Naeem, Muhammad Abubakr & Agyemang, Abraham & Hasan Chowdhury, Md Iftekhar & Hasan, Mudassar & Shahzad, Syed Jawad Hussain, 2022. "Precious metals as hedge and safe haven for African stock markets," Resources Policy, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:jrpoli:v:78:y:2022:i:c:s030142072200229x
    DOI: 10.1016/j.resourpol.2022.102781
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    More about this item

    Keywords

    Precious metals; African stock markets; Quantile coherency; Hedge effectiveness;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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