NEXUS BETWEEN NON-FERROUS METALS AND GLOBAL UNCERTAINTIES: INSIGHT FROM THE NICKEL CRASH

Drawing insights from the nickel crash, the study assessed the impact of the Ahir-led world uncertainty index (WUI) on industrial metals while also considering investor sentiments (VIX), crude oil volatility (OVX), and United States Policy Uncertainty (USPU). The study encompassed weekly data from January 2016 to January 2024, employing quantile regression (QR), quantile-on-quantile (QQR), and its causal components. QR analysis unveiled a feeble yet significant adverse sway of WUI on all sample metals across most quantiles, with zinc (lead) exhibiting weak, insignificant positive (mixed) nexus WUI. This adverse influence suggests the incapacity of these metals to function as hedges or safe havens during normal or turbulent periods. Nonetheless, the sporadic positive nexus with zinc hints at its limited hedge and haven potential. Analysis also highlighted the negligible impact of control variables on metals, except for VIX and aluminium at the 15th quantile, confirmed through QQR. The diverse coefficients observed in metals underscore the adaptive and heterogeneous market nature while disputing the established haven status in literature.