Gold market volatility spikes in times of uncertainty, risking mis-valuations.
The study looked at how economic uncertainty affects gold prices and volatility over time. They used a special model to analyze high-frequency data and found that uncertainty can make gold prices and volatility change in different ways. When uncertainty is high, gold prices can go up or down unpredictably, especially during crises. This means that gold may not always be a reliable way to protect investments when things are uncertain.