Risk - Adjusted Performance of Physical and Financial Gold Instruments in India During Geopolitical and Trade Stress

Authors

  • Ms. Saraswati Rai Doctoral Research Scholar in Commerce, Sikkim (Central) University, Gangtok- 737102 Sikkim (East) Author
  • Dr. B. Muthu Pandian Assistant Professor in Commerce, Sikkim (Central) University, Gangtok – 737102 Sikkim (East) Author
  • Dr. Ravi Shekhar Vishal Assistant Professor in Commerce, Sikkim (Central) University, Gangtok – 737102 Sikkim (East) Author

DOI:

https://doi.org/10.53983/ijmds.v15n02.002

Keywords:

Geopolitical Stress, Performance of Gold, Trade Tariff War, Synthetic Gold Investment, Gold as Safe-Haven

Abstract

Gold has long been used as a hedge against inflation, currency depreciation, and geopolitical unpredictability, as well as a safe-haven asset. The rise of alternative investment options, including Gold Futures, Gold Exchange Traded Funds (ETFs), and Sovereign Gold Bonds (SGBs), has caused investor preferences to migrate away from conventional physical gold. This study compares the performance of physical gold and its synthetic financial gold alternative investment vehicles throughout times of trade-related and geopolitical unrest. Their efficiency and risk-adjusted performance are assessed by research using risk and return metrics, such as Standard Deviation, Downside Risk, Sharpe Ratio, Treynor Ratio, Sortino Ratio, Jensen's Alpha, and Beta. The results show that Sovereign Gold Bonds continuously provide higher returns and better risk-adjusted performance, even while all gold-based investments serve as protective assets during uncertain times. While gold futures show greater volatility, especially during periods of acute market stress, Gold Exchange-Traded Funds (ETFs) show steady performance with modest risk. Gold prices are directly impacted by geopolitical conflicts, which can also raise commodity prices, alter interest rate policies, and disrupt global supply lines. Studying the risk and return dynamics of gold and its alternative avenues, such as Sovereign Gold Bonds (SGBs) and ETFs, is critical during the dual crisis of the Russia-Ukraine war and the US-India trade tariff war (2025–2026). The article emphasises how crucial it is to choose the right gold investment opportunities depending on investor risk tolerance and market circumstances. All things considered, the study advances our knowledge of gold's changing significance in portfolio diversification and financial stability throughout the uncertain economic periods.

Author Biographies

  • Ms. Saraswati Rai, Doctoral Research Scholar in Commerce, Sikkim (Central) University, Gangtok- 737102 Sikkim (East)

    Saraswati Rai is a Doctoral Research Scholar at Sikkim University pursuing a PhD with a focus on finance. She earned an undergraduate B. Com degree from Nar Bahadur Bhandari Degree College affiliated to Sikkim (Central) University and a Postgraduate M. Com from Sikkim (Central) University.

  • Dr. B. Muthu Pandian, Assistant Professor in Commerce, Sikkim (Central) University, Gangtok – 737102 Sikkim (East)

    Muthu Pandian. B is an Assistant Professor, Department of Commerce, School of Professional Studies, Sikkim University, (A Central University) Gangtok — 737102 Sikkim (East). His core areas of research focus on Banking and Financial Markets. He holds his Ph.D. (Commerce) with the specialization of finance on "Infusing Efficiency in Real Estate Capital Market (A Conceptual Model for Online Property Spot & Index Based Derivatives Exchange)" at Pondicherry University. His two patent applications are pending based on his doctoral research outcomes. Recently, one German patent award on "A System for Generating a Composite Risk Index (CRI) for Financial Markets" Which is founded on the work done with his doctoral research fellow. He is credited with a book entitled “Statistical Methods for Practice and Research: A Guide to Data Analysis Using JAMOVI” (ISBN: 978 – 81989982 – 2 – 4) coauthored with his colleague published under the reputed national publisher.

  • Dr. Ravi Shekhar Vishal, Assistant Professor in Commerce, Sikkim (Central) University, Gangtok – 737102 Sikkim (East)

    Ravi Shekhar Vishal is an Assistant Professor, Department of Commerce, School of Professional Studies, Sikkim University, (A Central University) Gangtok — 737102 Sikkim (East). His core areas of research focus on Human Resource, Skill Development, Infrastructure Finance, Organizational Behaviour, Strategic Management & Law. He holds LLB Degree and Ph.D. (Commerce) with the specialization of Human Resource Management on "Human Resource Management Practices in Central Public Sector Undertakings — A Case Study of D.L.W. Varanasi" from VBS Purvanchal University. He is credited with one German patent along with his colleague and doctoral research fellow of the department. He is credited with a book entitled “Statistical Methods for Practice and Research: A Guide to Data Analysis Using JAMOVI” (ISBN: 978 – 81989982 – 2 – 4) coauthored with his colleague published under the reputed national publisher.

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Published

2026-02-16

Issue

Vol. 15 No. 2 (2026): International Journal of Management and Development Studies

Section

Articles

How to Cite

Rai, S., Pandian, B. M., & Vishal, R. S. (2026). Risk - Adjusted Performance of Physical and Financial Gold Instruments in India During Geopolitical and Trade Stress. International Journal of Management and Development Studies, 15(2), 08-19. https://doi.org/10.53983/ijmds.v15n02.002

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