The 2008 global financial crisis and COVID-19 pandemic: How safe are the safe haven assets?

Muhammad A. Cheema, Robert Faff, Kenneth R. Szulczyk

Research output: Contribution to journalArticleResearchpeer-review

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.
Original languageEnglish
Article number102316
JournalInternational Review of Financial Analysis
Volume83
Early online date28 Jul 2022
DOIs
Publication statusPublished - Oct 2022

Fingerprint

Dive into the research topics of 'The 2008 global financial crisis and COVID-19 pandemic: How safe are the safe haven assets?'. Together they form a unique fingerprint.

Cite this