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Over the centuries, gold always occupied an important place in the history of humanity. Today, gold is still considered as a rare metal, as a raw material but also as a financial asset. Indeed, during the last 15 years gold has become a very popular investment thanks to the introduction of new vehicles allowing an investor to be indirectly exposed to the precious metal market such as gold ETFs, mutual funds and gold mining shares. This sudden interest for the yellow metal was also fostered by the recent financial crisis that has shaken the financial markets and by the necessity for portfolio managers to find new investment opportunities in "uncorrelated" assets which provide consistent performance in all market conditions. Therefore, this thesis examines the extent to which gold can still nowadays be considered as a good investment opportunity for an investor. The objective of this work is therefore to provide an answer to three main questions which are: Can gold still be considered as a safe haven? To what extent can gold be used as a portfolio diversification tool? Which type of gold investment would be recommendable for this purpose? Answers to these questions were obtained by using various descriptive statistics together with the concepts of the Modern Portfolio Theory introduced by Harry Markowitz (1952). It was therefore demonstrated that physical gold can indeed be considered as a safe haven asset to the extent that its correlation with equities and its systematic risk measured by the beta are becoming very low in times of crisis. However, the same conclusions could not been drawn from paper gold related investments. In terms of diversification potential, it was identified that gold and particularly physical gold investments are useful tools for diversification purpose since in all time periods studied, they are almost always included in efficient portfolios and systematically present in the Minimum Variance, Optimal Sharpe and Sortino portfolios. Moreover, thanks to the efficient frontier, it was shown that gold investments allow investors in general to have access to more efficient portfolios for which they can obtain higher performance for a given level of risk. Finally, it was also identified that silver can acts as a close substitute to gold even if this metal should never be chosen above gold.

gold --- gold market --- investing in gold --- safe haven --- portfolio diversification --- risk and return. --- Sciences économiques & de gestion > Finance

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This paper provides an overview of the period prior to the recent global crisis, and the policies that were adopted around the world in response to the crisis. It highlights a number of key issues regarding economic and financial policies that governments have faced both globally and nationally. These are related to the management of boom and bust episodes that deserve more attention in policy circles in the future.

Access to Finance --- Accounting --- Capital account --- Capital markets --- Cross-border flows --- Currencies and Exchange Rates --- Debt Markets --- Developing countries --- Domestic credit --- Economic Theory & Research --- Emerging Markets --- Expenditures --- Finance and Financial Sector Development --- Financial crisis --- Financial market --- Financial stability --- Financial system --- Global markets --- International bank --- Macroeconomics and Economic Growth --- Policy responses --- Portfolio --- Portfolio diversification --- Private Sector Development --- Remittances --- Stock market --- Stock market capitalization --- Trading

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This paper provides an overview of the period prior to the recent global crisis, and the policies that were adopted around the world in response to the crisis. It highlights a number of key issues regarding economic and financial policies that governments have faced both globally and nationally. These are related to the management of boom and bust episodes that deserve more attention in policy circles in the future.

Access to Finance --- Accounting --- Capital account --- Capital markets --- Cross-border flows --- Currencies and Exchange Rates --- Debt Markets --- Developing countries --- Domestic credit --- Economic Theory & Research --- Emerging Markets --- Expenditures --- Finance and Financial Sector Development --- Financial crisis --- Financial market --- Financial stability --- Financial system --- Global markets --- International bank --- Macroeconomics and Economic Growth --- Policy responses --- Portfolio --- Portfolio diversification --- Private Sector Development --- Remittances --- Stock market --- Stock market capitalization --- Trading

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At this stage, it is difficult to conclude that the euro will have substantial macroeconomic impact on sub-Saharan Africa, unless launch of the euro becomes the tool of a major policy shift, such as the euroization of the continent - which is currently unlikely; In considering how the euro will affect Sub-Saharan Africa, Cohen, Kristensen, and Verner examine the transmission channels through which the euro could affect economies in the region. They examine the risks and opportunities the euro presents for Sub-Saharan African countries. They especially examine the effects from the trade channel, through changes in European economic activity and the real exchange rate. Because of the relatively low income elasticity for primary commodities - which is what Sub-Saharan Africa mainly exports - an increase in activity in Europe is considered to have a marginal impact on Africa. Exchange rate regimes and geographical trade patterns point to large differences in exposure to changes in the real exchange rate. Capital flows to Sub-Saharan Africa can be affected through portfolio shifts or through changes in foreign direct investment. Changes in competitiveness in Europe are not expected to influence foreign direct investment, so the euro is not expected to affect foreign direct investment significantly. Portfolio diversification could increase greatly. But Sub-Saharan Africa is not expected to realize the increased potential from portfolio diversification because of its severely underdeveloped domestic capital markets. It is vitally important that Sub-Saharan African countries strengthen their financial integration into global markets. How the euro will affect such parts of the financial system as banks and debt and reserve management varies across countries. Generally the effect is expected to be limited. This paper - a product of Poverty Reduction and Economic Management Sector Unit, Latin America and the Caribbean Region - is part of a larger effort in the Bank to study the effect of the euro on developing countries. The authors may be contacted at nkristensen@worldbank.org or dverner@worldbank.org.

Banking System --- Banks and Banking Reform --- Capital Flows --- Country Risk --- Currencies and Exchange Rates --- Debt --- Debt Markets --- Domestic Capital --- Domestic Capital Markets --- Economic Theory and Research --- Emerging Markets --- Exchange --- Finance and Financial Sector Development --- Foreign Debt --- Foreign Direct Investment --- Foreign Direct Investments --- Global Markets --- Interest --- Interest Rate --- International Capital --- International Capital Markets --- Macroeconomics and Economic Growth --- Market --- Portfolio --- Portfolio Diversification --- Private Sector Development --- Real Exchange Rate --- Reserve