Gold Investment Preferences and Rational Pathways under Crisis Memory

Abstract

Based on the crisis memory theory in behavioral finance, this paper reviews relevant literature, focusing on the continuous fluctuations in the gold market following the 2020 pandemic. By examining investors’ risk-averse tendencies and irrational behaviors such as trend chasing and premature selling, this paper systematically explores the impact of crisis memory on investment behavior and possible rational responses under such conditions. There is a lack of systematic reviews by scholars in this field. A comprehensive review of existing studies indicates that: (1) The behavioral finance channel is a core mechanism through which tail risk and market linkages are transmitted. The behavioral inertia formed by crisis memory triggers irrational herding, and investor sentiment guidance creates a synergistic amplification effect, causing gold prices to deviate from fundamentals; (2) A multi-factor dynamic regulation mechanism significantly alters the trajectory of risk transmission. Increased institutional participation and policy expectation management can effectively hedge panic-driven tail shocks, whereas the intensity of retail-institutional game interactions has a differentiated moderating effect on the transmission; (3) The effects of behavioral factors on the market exhibit significant time-varying heterogeneity, with financial news factors and macro-policy factors showing pronounced enhancement effects on regulation. It is recommended to enhance the resilience of the gold market to tail risks through measures such as optimizing market microstructure and strengthening investor sentiment guidance, providing a decision-making basis for financial stability and high-quality development.