Abstract
We analyze which type of gold investment is better for investors by studying the determinants of gold mining stocks (gold stocks) and Gold Exchange Traded Commodities (Gold ETCs) returns, over the period from March 2012 to February 2024. We find that gold ETCs are significantly positively associated with economic policy uncertainty (EPU), allowing investors to benefit from higher gold returns during times of increased EPU. Gold stocks are also more sensitive to oil price increases than ETCs, which tend to rise during geopolitical tensions. Investing in gold stocks is therefore less suitable for investors who buy gold as a safe-haven asset.
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