Abstract
Highlights
• The character of safe-haven assets has changed between two big crises of our time.
• Gold has lost its safe-haven status during COVID.
• Safe-haven character of other traditional safe-haven assets, silver, US dollar, and T-bonds, has also weakened during COVID.
• Swiss franc maintains its safe-haven status during the COVID-19 pandemic.
We compare the performance of safe-haven assets during the Global Financial Crisis (GFC) and COVID-19 pandemic. First, regarding the GFC, we find, intermediate (weak) safe haven evidence for US dollar, Swiss franc and T-bonds (Gold, Silver and T-bills). Second, with regard to COVID, we find gold is very risky in some settings, while silver has become extremely risky. Collectively, our findings suggest that the character of safe-haven assets has changed between the crises. Therefore, investors should exercise extreme care when investing in potential safe-haven assets during times of market stress.
• The character of safe-haven assets has changed between two big crises of our time.
• Gold has lost its safe-haven status during COVID.
• Safe-haven character of other traditional safe-haven assets, silver, US dollar, and T-bonds, has also weakened during COVID.
• Swiss franc maintains its safe-haven status during the COVID-19 pandemic.
We compare the performance of safe-haven assets during the Global Financial Crisis (GFC) and COVID-19 pandemic. First, regarding the GFC, we find, intermediate (weak) safe haven evidence for US dollar, Swiss franc and T-bonds (Gold, Silver and T-bills). Second, with regard to COVID, we find gold is very risky in some settings, while silver has become extremely risky. Collectively, our findings suggest that the character of safe-haven assets has changed between the crises. Therefore, investors should exercise extreme care when investing in potential safe-haven assets during times of market stress.
| Original language | English |
|---|---|
| Article number | 102316 |
| Journal | International Review of Financial Analysis |
| Volume | 83 |
| Early online date | 28 Jul 2022 |
| DOIs | |
| Publication status | Published - Oct 2022 |