Title:
THE HEDGING POWER OF GOLD AGAINST INDIAN EQUITY SECTORS

Authors:
Veerendra Anchan , Kalp Pandya and Om Salgaonkar, India

Abstract:
This study investigates gold's ability to hedge against volatility in the Indian equities market, with an emphasis on the auto and energy sectors, by employing the GARCH Model. The findings show that gold has moderate hedging potential, notably in the energy sector, where volatility persists. However, in the car sector, shocks have a short-lived impact, reducing gold's effectiveness as a long-term hedge. Despite its capacity to reduce volatility, gold's negative average returns and the model’s instability emphasise its shortcomings as a reliable hedging strategy.