Performance of the gold asset class compared to indices since the end of the Bretton Woods system
Year: 2024
Type: article
Abstract: The article investigates the performance of gold as an asset class compared to major financial indices such as the S&P 500 and DAX since the end of the Bretton Woods system in 1971. The study aims to evaluate gold's role as a hedge against inflation and market volatility, assessing its effectiveness as a stable investment during periods of economic uncertainty. The research uses historical data to examine annual and tax-adjusted returns and cumulative abnormal returns to provide a comprehensive analysis of gold's performance relative to these indices. The findings indicate that gold has generally outperformed the S&P 500 and DAX, particularly in times of financial crises such as the 2008 financial meltdown and the COVID-19 pandemic. The tax-adjusted performance further underscores gold's advantages for long-term investors, highlighting its non-inflationary nature and limited availability. While the statistical significance of gold's abnormal returns varies, its positive cumulative abnormal returns (CAR) emphasize its robustness as an investment. The research involves a two-sample t-test to compare the returns of gold with those of the S&P 500 and DAX. The results reveal that gold offers a significant positive return difference compared to the tax-adjusted index returns of these indices, reinforcing its value for portfolio diversification and performance enhancement
Source: Acta Montanistica Slovaca
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4408242843