Evaluating Gold's Safe Haven Properties in MENA Equity Markets

Lasheen, Hadia Yasser; El Mosallamy, Dalia Ahmed; Pasha, Rania

doi:10.21608/msamsj.2025.385283.1104

Evaluating Gold's Safe Haven Properties in MENA Equity Markets

Document Type : Original Article

Authors

¹ Department of Business Administration and Entrepreneurship, University of Price Edward Island (UPEI), Cairo Campus

² Faculty of Business, BEAPS, The British University in Egypt.

³ Business Department, Faculty of Business Administration, Economics and Political Science, The British University in Egypt, Cairo, Egypt

10.21608/msamsj.2025.385283.1104

Abstract

This study investigates the relationship between gold and equity markets during periods of market instability, focusing on the hedging and safe haven properties of gold over the past 17 years (2006 to 2023).The study contributes to the existing literature by revisiting the safe haven theory and testing it within the Middle East and North Africa (MENA) region using the DCC-GARCH, while also examining the properties of gold under two major crises: the Global Financial Crisis (GFC) and the COVID-19 pandemic. The methodology is divided into two stages: the first examines the overall relationship between gold and equity markets throughout the entire sample period, while the second focuses on the distinct crises to determine whether gold's properties differ between them. The results from the DCC-GARCH models reveal significant variations in gold's properties across different countries and crises. On average, gold is classified as a safe haven asset in all examined markets during the GFC. However, its safe haven characteristics were not uniformly observed during the Covid-19. Overall, the analysis concluded that gold typically acts as a weak safe haven asset across the region, except for Qatar, where its protective qualities were stronger. This study contributes to the understanding of gold's role in financial markets, particularly in the context of the MENA region, and provides valuable insights for investors and policymakers navigating periods of economic uncertainty

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