What Metals Act as Safe-Haven Against the Exchange Rate Risk of the Turkish Lira Amid to a Trade War, A Pandemic, And a War?

This paper examines if gold, silver, palladium and platinum are safe-haven assets against the exchange rate risk of the Turkish lira from 1 January 2005 to 29 April 2022. Specifically, we examine the safe-haven properties of metals around three different shocks, a trade war between U.S. and Turkey, the COVID-19 pandemic and Russia-Ukraine war by considering different investment horizons. Results show that gold offers the best hedging performance, in average. Amid to the trade war shock all the metals maintain their negative dependence relationships with lira/dollar rate. However, COVID-19 shock changed the negative dependences between metal returns and lira/dollar rate into positive dependences. Only gold re-gained safe-haven ability following two-months after the declaration of COVID-19 as a pandemic. Finally, with the start of the Russia-Ukraine war the safe-haven potential of metals gained significant strength, specifically when metal returns are above median, and best safe-haven is palladium during the war.