Gold

Is gold a prototypical hedge (based on average uncorrelated or negatively correlated behavior) and safe haven (based on uncorrelated or negatively correlated behavior during a market crash)? Two recent papers address this question. In the February 2009 update of their paper entitled “Is Gold a Hedge or a Safe Haven? An Analysis of Stocks, Bonds and Gold”, Dirk Baur and Brian Lucey examine the hedging/haven behavior of gold for stocks and bonds during normal market conditions and during extreme market events. In their September 2009 paper entitled “Is Gold a Safe Haven? International Evidence”, Dirk Baur and Thomas McDermott investigate whether gold represents a safe haven with respect to stocks of major emerging and developing countries. These studies conclude that: Keep Reading