On the similarities between precious metals, precious metal stocks and equities – International evidence for gold and silver

Abstract

The study attempts to assess if the precious metal stocks behave more like their metal or stock counterparts. We use both Maximal Overlap Discrete Wavelet Transform and Continuous Wavelet Transform to test the time and frequency-varying association of precious metal stocks with the precious metals and broader equity indices. The empirical shreds of evidence are suggestive that precious metal stocks behave more like precious metals than common stocks. The results bear important policy implications for the multi-horizon investors wishing to expose themselves to precious metal stocks, precious metals and common stocks.