Have Precious Metals Lost Their Protective Powers During COVID-19 and the Russia-Ukraine War?

Abstract

We reassess the inflation-hedging potentials of precious metals during the COVID-19 and Russia-Ukraine war periods and document findings for some advanced and emerging markets. We adopt the dynamic panel threshold regression model and account for the policy rates of the economies in the analyses. We find that while gold retained its protective powers, the reverse was the case for silver during the pandemic and the war in Ukraine. We offer a suggestion for investors and recommend that related studies take account of the monetary policy environment of the markets.