Does gold glitter in the long-run? Gold as a hedge and safe haven across time and investment horizon

During times of market turmoil, investors often seek to mitigate risks associated with traditional investment assets such as equities and debt. The hedging and safe-haven properties of gold are examined in this paper for investors with short- and long-run horizons. Utilizing wavelet analysis, we find that gold acts as a hedge for a variety of international equity and debt markets for horizons of up to one year. The safe haven properties of gold during financial crises are further established, with gold shown to act as a safe haven for equity investors for long-run horizons of up to one year. However, during the economic contractions of the early 1980s gold is found not to act as a safe haven, displaying a positive relationship with equities across a range of horizons.