Safe Haven Assets - the Role of Precious Metals in Preserving Wealth

Abstract: This study examines whether precious metals can be considered to be safe haven assets. The safe haven asset concept is part of the flight-to-quality theory. These assets possess certain qualities that make them attractive as investments in times of extreme stock market conditions. Previous research indicates that gold has this kind of qualities. This study is different to other studies in that it includes both gold and other precious metals as potential safe haven candidates. It is also different in that it considers time-varying skewness and co-skewness of metal and stock returns. We find gold, platinum and silver as good options for investors seeking diversification through safe haven assets.