The Role of Gold and Exchange Rate as Safe Haven for Indonesian Market during Donald Trump’s Presidential Election Victory
Keywords:
Gold, Exchange Rate, Safe Haven, Hedge, GARCH (1, 1)Abstract
This study aims to evaluate whether gold and the USD/IDR exchange rate serve as safe haven assets during Donald Trump’s euphoric victory. Data used in the study were daily closing prices of gold, USD/IDR exchange rate, and JCI from 7 November 2024 to 20 January 2025, which were analysed using QREG (to analyse safe haven properties) and GARCH 1.1 (to examine hedging effectiveness). The finding showed that throughout the study period, gold consistently functioned as a hedging asset, while USD/IDR proved to be a safe haven and hedging instrument for the Indonesian market. It is hoped that this study may provide additional literature for investors to help them manage their risk profile during market turmoil, particularly during US presidential elections.References
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