This study empirically examines the correlation dynamics between gold prices and the NIFTY50 index within the Indian market, specifically contrasting the acute panic period of the COVID-19 pandemic with the subsequent post-pandemic stabilisation phase. Utilising daily frequency data and a robust statistical framework including Kolmogorov-Smirnov normality testing and Spearman’s Rho correlation, the research evaluates the time-varying nature of gold as a safe-haven asset. Findings reveal that during the height of the COVID-19 crisis, the correlation between gold and equities was near zero (0.012), effectively validating gold’s role as an independent diversifier during systemic shocks. However, analysis of the post-pandemic recovery period shows a significant shift toward a strong positive correlation (0.883), suggesting that common macroeconomic factors like inflation and liquidity transitions began driving both asset classes in tandem. The results offer critical insights for institutional investors regarding the limitations of gold as a permanent hedge during transitional economic regimes.
Akash Jaiswal (2025) studied this question.