Gold Investment Decisions under Economic Uncertainty: A Strategic Analysis of Retail Investors’ Risk Perception

Abstract

Historically, gold has been viewed as a safe haven asset, especially when economic uncertainty abounds, and inflation, recession, financial crises and market volatility are all experienced. When traditional monetary instruments like stocks and bonds are unstable, retail investors tend to switch to investing in gold. The economic uncertainty in relation to investment decision in gold among the retail investors with special focus on the risk perception and financial literacy and investment motivation.
This study is quantitative research design with primary data obtained from 180 retail investors by using structured questionnaire. To study the relationships between variables, statistical methods such as correlation and regression were used. The findings show that economic uncertainty has a significant effect on intention to invest in gold (β = 0.49, p < .001). Economic uncertainty has a partial mediating effect on the relationship between risk perception and investment decisions regarding gold, and financial literacy enhances investors’ ability to allocate gold wisely in investment portfolios.
This proposed model accounts for 58% of the variance in the gold investment intention. The results validate the strategic importance of gold in portfolio diversification and risk management. The study offers significant insights for retail investors, financial advisors and policy makers on how investors act during times of economic uncertainty.