An evaluation of gold as an inflation hedge: Empirical evidence from South Africa

摘要: The plague of inflation eating into investor returns is one that experienced universally by all investors. Gold has historically proven to provide good inflationary hedging ability, due its appreciating prices in times high inflation. However, the recent period price depreciation from 2012 amidst rising South Africa, brought usefulness as a hedge question. purpose this study therefore thoroughly examine use gold an African environment. In problem particularly severe one, with rates reaching double figures periodically. necessity against imperative investors, mitigate their diminishing real returns. extends over 2000 – 2014, incorporate for Monetary Policy Committee Africa’s introduction targeting regime. there are two popular alternatives when purchasing bullion, whilst other known Krugerrand. Krugerrand minted 22 carat gold, and vehicle private investment Africa easily accessed both institutional We utilized krugerrand possible hedges order evaluate whether any difference respective particular, which more appropriate. also decomposed different types, are: actual, expected, unexpected Testing was conducted on data short run long run, making OLS regressions analysis, Johansen’s Cointegration analysis. results statistical tests found were be statistically significant inflation, sign negative indicate increases, decreases, contrary way should perform. analysis able actual but not anticipated overall had superior ability alternatives. This may investors who concerned effects portfolios, they can include potential effects.