Herding, Market Efficiency, and the Melting Pot Effect: Evidence from the Precious Metals Market

This study investigates the dynamics of market efficiency and herding behavior in four leading precious metals - gold, silver, platinum, and palladium - during and after the COVID-19 pandemic using 5-day-week data from December 9, 2019 to March 1, 2026. Employing Multifractal Detrended Fluctuation Analysis (MFDFA) to estimate generalized Hurst exponent (GHE), magnitude of long memory (MLM), and the predictability of return, the findings reveal heightened fractal spectrum and increased herding tendencies during the post-pandemic period for only gold. While the fractal dimension improves for these metals, excluding for gold, they all exhibited weaker long-memory characteristics and thereby an upward trend in the degrees of inefficiencies, implying resistance to persistent shocks, estimated by the MLM approach. Within this framework, the returns of silver, platinum, and palladium became more predictable during the post-pandemic period, implying lower volatility. These results highlight structural shifts in investor behavior and the patterns of market efficiency during crisis periods, providing important insights for enhancing market resilience and volatility management.