Precious metals serve as safe-haven assets during economic crises, playing a pivotal role in the reallocation of capital from stock markets. Influenced by factors such as inflation, economic uncertainty, monetary policies, and geopolitical events, these metals exert either positive or negative effects on stock indices. This study aims to investigate the impact of gold and silver price volatility on the stock indices of selected Islamic countries over the period from 2006 to 2022. Employing a quantitative methodology grounded in econometric models, the research adopts a hybrid approach integrating quantile regression with wavelet transforms to analyze the distributional properties of variables across quantiles and temporal scales (short-term, medium-term, and long-term).
The findings reveal that fluctuations in gold and silver prices have a direct and statistically significant influence on the stock indices of the selected countries. Wavelet coherence analysis indicates an overall in-phase relationship among the variables: in the short term, stock indices exhibit leading behavior; in the medium term, gold and silver take the lead; and in the long term, correlations diminish. Quantile regression results highlight variations across wavelet scales, with D1 showing stronger effects in higher quantiles, D2 demonstrating greater stability, and D3 exhibiting weaker impacts. A similar pattern, albeit with reduced intensity, is observed for silver. Consequently, these volatility dynamics aid policymakers in formulating fiscal policies and assist investors in risk management. Recommendations include multi-scale analyses for forecasting, mitigating dependencies on price fluctuations, and developing novel financial instruments. This research addresses a gap in the literature on Islamic countries and introduces methodological innovations