Empirical Comparative Study On Risk Management Tools Of Precious Metals

In recent years,the international macro-economic situation is grim.The economies of developed countries such as the United States,the European Union,Japan and other developing countries such as China are facing the risk of growth decline.In addition,the rise of international trade protectionism,gold,silver and other precious metals with risk aversion function are sought after by investors.However,compared with developed countries such as Europe and America,China’s precious metal market started late,and there are still some problems in the mainstream risk management models VaR and CVaR.Therefore,this paper attempts to introduce SRM model to solve the problems existing in the current VaR and CVaR models.This paper combs the influencing factors of precious metals,the impact of precious metals price fluctuations,common risk management tools and other related literature,and summarizes several influencing factors of precious metals market price through the combing of these literature:macroeconomic,international geopolitical conflicts,interest rates,exchange rates,inflation,policy changes,related commodity prices,speculative manipulation.Then,this paper analyzes many factors that affect the risk of precious metal market in China and the transmission mechanism.Through the analysis,it is found that the international geopolitical conflicts,interest rates,exchange rates,policy changes,speculative manipulation and other factors are short-term and medium-term,while the macro-economy and related commodity prices are long-term and mediumterm factors,which jointly promote the sharp fluctuations of precious metal prices.In addition,all the influencing factors can be attributed to the impact on the commodity attributes and financial attributes of precious metals.Finally,according to the principle of trading volume and activity,this paper selects the time series data of the representative precious metals of gold,silver and platinum in Shanghai gold exchange from November 1,2006 to September 30,2019 as the empirical research object.And then studies the statistical characteristics of the trading price data of the three precious metals in 13 years.It is found that the volatility of silver is the largest,while that of platinum is the smallest.In addition,according to VaR,CVaR and SRM models,this paper builds three risk management models,and then compares the effectiveness and advantages and disadvantages of the three models in precious metal risk management.The empirical results show that CVaR model and SRM model can better describe the market risk of precious metals than VaR model;SRM model introduces the risk preference of investors,when the risk preference of investors is too low or too high,the method does not have advantages,but when the risk preference of investors is between 40-120,the method can better describe the market risk of precious metals than CVaR model.