Bi-OSW-MF-DFA: An Enhanced Multifractal Method for Gold and Silver Market Risk Assessment

Abstract

Amid global economic uncertainty and inflationary pressures, precious metals have gained prominence as safe-haven assets, yet accurately quantifying their risk remains challenging due to the inherent limitations of existing fractal analysis methods. Conventional Multifractal Detrended Fluctuation Analysis (MF-DFA) suffers from boundary-induced artifacts and computational inefficiencies, which can distort risk measurements and obscure true market dynamics. To address this gap, we introduce an enhanced method—Binary Overlapped Sliding Window MF-DFA (Bi-OSW-MF-DFA)—that mitigates segmentation discontinuities and improves computational robustness through overlapping windows and binary series partitioning. Applied to spot gold and silver markets, our approach reveals that silver exhibits stronger multifractality and higher inherent risk than gold, with long-range temporal correlations identified as the primary driver of multifractal behavior. This study offers a refined analytical framework for market risk assessment and provides actionable insights for investors and portfolio managers navigating precious metals volatility.