Escape from COVID-19 pandemic to safe haven

Abstract

Gold, which is accepted as a safe haven by households, is known as an investment tool that is preferred especially in times of crisis and uncertainty. Especially in recent days, the uncertainty caused by the COVID-19 pandemic and the visible increase in Turkey's 5-year CDS data has led investors in Turkey to grams of gold, which is considered a safe haven. In this context, this study aims to test the long-term relationship between daily case-related deaths and Turkey's 5-year CDS data with gram gold prices in Turkish lira during the COVID-19 pandemic. The long-term relationship between the variables was tested with the autoregressive distributed lag bound test (ARDL bound test) applied to the daily data for the period March 17, 2020-April 11, 2020. For the application of ARDL bound test, the stationarity of the variables was tested with unit root tests such as augmented Dickey-Fuller test (ADF) and Phillips-Perron (PP). According to the ARDL bound test findings, there is a statistically significant and positive relationship between the number of case-related deaths and the gram gold prices in Turkish lira in the long run. However, it has been found that Turkey's 5-year CDS data does not have a significant long-term relationship with gram gold prices in Turkish lira.