International Gold Price Research Articles

Gold Price Inflation and Its Implications for Financial Markets: Strategies for Mitigation

Abstract: Gold prices are among the most important indicators in the global financial market. The international gold price has continued to rise in recent years, repeatedly setting new records, accompanied by a boom in gold consumption and investment. The rapid rise in gold prices is due to a combination of factors. Supply and demand, economic conditions, and geopolitical events can lead to price fluctuations. Among them, economic conditions depend on monetary policy, inflation expectations, and market volatility, which may affect the trend of gold prices. The rise in gold prices has exacerbated market volatility and put higher demands on risk management for financial institutions. At the same time, the rise in gold prices has also affected the entire financial industry and changed traditional asset allocation strategies. This article examines the influence of increasing gold prices on the financial market and proposes potential preventive measures or solutions through a survey of literatures, theoretical analysis and logical reasoning. At the same time, this can help financial traders plan their funds reasonably, reduce the impact of inflation and currency devaluation, and better cope with changes in international trade and exchange rates, thus allowing the financial market to operate better.

Asymmetric connectedness among BSE SENSEX, INR–USD exchange rate, gold price and crude oil price: fresh evidence from nonlinear ARDL

PurposeThis paper investigates the asymmetric connectedness among the Indian stock market, crude oil price, gold price and the USD–INR exchange rate.Design/methodology/approachWe construct a nonlinear autoregressive distributed lag model that contains the four aforementioned variables. We further used the pairwise Granger causality test to identify the direction of causality.FindingsThe results verify an asymmetrical long-run co-movement between the Indian stock market index, exchange rate, international crude oil prices and gold prices. In the long run, the performance of the Indian stock market is mainly affected by both positive as well as negative shocks in the INR–USD exchange rate, positive shocks in gold prices and positive shocks in crude oil prices. Further, a feedback mechanism is observed between positive shocks in the INR–USD exchange rate and Indian stock market performance.Originality/valueThe research paper revisited the linkage among the variables using a novel methodology proposed by Shin et al. (2014).

Research on Gold Price Prediction Based on LSTM Modeling

Gold plays a pivotal role in asset allocation, and the construction of gold price prediction models represents a complex yet rewarding task within the field of finance. The problem of international gold price is addressed in this paper forecasting by proposing a standard Long-Short Term Memory (LSTM) model and introducing bi-directional LSTM (Bi-LSTM) networks and multivariate analysis to compare the forecasting accuracy of the relevant models. This comparison is based on the daily gold price of the London Bullion Market Association (LBMA) for 2013-2022. This methodology takes into account various factors that influence the gold market and incorporates them as input sources into the Multi-factor LSTM model, thereby enhancing the interpretability of the LSTM model. Correlation analysis and the Granger test are employed to analyze these influencing factors. However, the results of this study suggest that while the Multi-factor LSTM model may be more accurate in predicting outliers, it tends to increase the number of small errors. On the other hand, the inclusion of Bi-LSTM networks can improve the overall accuracy of gold price prediction.

Macroeconomic Determinants of the Gap between Domestic and International Gold Prices in Vietnam

This research investigates the factors influencing the disparity between domestic gold prices (SJC gold and 9999 gold) and global gold prices in Vietnam from January 2011 to December 2023. Using the Autoregressive Distributed Lag (ARDL) model, we identify key macroeconomic determinants impacting this price spread, including interest rates, oil prices, and consumer demand. Our findings reveal that higher interest rates are associated with larger price spreads, suggesting that monetary policy plays a significant role in the domestic gold market. Oil prices exhibit a negative relationship with the price spread for 9999 gold, indicating that rising oil prices tend to align domestic gold prices more closely with global trends. Consumer demand notably affects the SJC_Global price spread but not the 9999_Global spread, reflecting the different market dynamics of finished goods versus raw materials. Additionally, the error correction terms in both models indicate a robust mechanism for long-term equilibrium, demonstrating the Vietnamese gold market’s resilience. These insights highlight the need for policymakers to reconsider existing regulations, such as Decree 24, to ensure a stable and efficient gold market. The study concludes that while the Vietnamese gold market exhibits sustainable practices, regulatory revisions are necessary to support both market growth and community development. Future research should consider additional macroeconomic variables and the impact of regulatory changes over time to further understand the dynamics of gold price disparities in Vietnam.

The Effects of Various Internal and External Factors on the Movement of the Indonesian Sharia Stock Index on the Indonesia Stock Exchange

This study analyzed several factors that affect the Indonesian Sharia Stock Index. The use of the inflation-currency rate, the availability of money, and the BI rate were all internal factors considered in this study. Meanwhile, the external factors used in this study were international gold and oil prices. The Engle-Granger Error Correction Model was used to analyze time series data in this study. The research used the monthly period started from May 2013 until January 2022. The long-term results of the research variables that could influence the exchange rate, total money supply, world oil prices, and world gold prices were all dependent on the Indonesian Sharia Stock Index. Meanwhile, the factors that influence the short-term movement of the ISSI exchange rates were inflation, and the BI rate variables.

Gold Smuggling in India and Its Effect on the Bullion Industry

This study strives to examine when and where most of the gold smuggling takes place in India. It further analyses the causal relationship between smuggled gold and other macroeconomic variables. Finally, it analyses how the smuggled gold affects the Indian bullion industry. The data related to gold smuggling has been sourced from the website of the Directorate Revenue Intelligence and analysed using graphs and the Granger causality test. The variables used in the study are the quantity of smuggled gold, exchange rates, the major stock indices in the world, the number of auspicious days in a month, domestic and international gold prices, India’s jewellery export, the GDP, customs duty, and the domestic gold supply. The results revealed that most of the gold smuggling takes place on Fridays and mostly occurs in the months of October, November, and December. The states of West Bengal, Delhi, Maharashtra, and Tamil Nadu account for most of the gold smuggling in India. A positive correlation is observed between the smuggled gold, India’s gold demand, the number of auspicious days in the month, India’s jewellery export, India’s GDP, India’s domestic gold supply, and stock indices such as SENSEX, FTSE100, DFMGI. Gold smuggling in India is caused by India’s gold demand, the level of jewellery export, the GDP, domestic and international gold prices, and India’s customs duty.

The Co-volatility of Uncertainty Shock on Chinese Exchange Rate: Based on Time-frequency Domain and Time-varying Method

In recent years, with the global epidemic, the Russia-Ukraine conflict, the great power game, and so on events, the international political and economic environment has become more and more unstable, the USDCNY exchange rate fluctuates significantly, and the external uncertainty risk shocks negatively hit the foreign exchange market. Based on this, this article expands global uncertainty risk shocks into four dimensions: global geopolitical risk, U.S. economic policy uncertainty, Chinese economic policy uncertainty, and VIX index, in addition to adding international WTI crude oil and gold price as additional variables, which are significantly correlated with both, to study the linkage among uncertainty shocks, commodity volatility and USDCNY exchange rate from the time-frequency domain. Furthermore, we analyze the time-varying spillover effects among variables at different frequency scales by decomposing the data into multiple scales using the Maximum Overlap Discrete Wavelet Transform (MODWT). Findings reveal that uncertainty factors and commodity prices exert distinct influence mechanisms on the USDCNY exchange rate under different cycles of frequency fluctuations. At various time-frequency domain volatility scales, VIX and WTI generate significant risk spillovers over the USDCNY exchange rate. Moreover, when global major events occur, time-varying spillover effects of variables are also heterogeneous. The research findings presented in this paper can provide valuable insights for policymakers and investors regarding the impact of international uncertainty shocks on the Chinese exchange rate across various short, medium, and long frequencies. This understanding can aid in managing uncertainty risks in decision-making processes, ultimately facilitating the efficient functioning of the foreign exchange market.

The Linkage Between International Gold Price and Chinese Stock market

Based on the related theory of stock market linkage, this paper uses the Copula model to analyze the correlation between international gold market and the Chinese stock market. The three important nodes of the process of financial and economic internationalization in China are analyzed in stages. According to the results, the correlation between the international gold market and the Chinese stock market is weak in general, when China does not join the WTO, the Chinese stock market and the international gold market are asymptotically independent; with the gradual deepening of China's internationalization process, the tail correlation between the two is gradually increasing.

Comparative Analysis of the Volatility Structures of the Stock Prices of Energy Companies Traded on the Kazakhstan Stock Exchange and International Gold and Oil Prices

The return of its stock exchange and the companies traded within are one of the important indicators for a national economy. Due to the global structure of stock markets, returns are closely related to both national and international market variables. This study makes a comparative analysis of the volatility structures of the energy companies traded in the Kazakhstan Stock Exchange (KASE) and the combined stock market index and gold and oil prices in international markets for the period between January 01, 2021, and June 31, 2023. The research focused on two issues. The first is the analysis of the volatility structure of the six series examined. For this purpose, four different models were examined. The second focus is to determine whether the returns in international indices have a causal effect on the Kazakhstan stock market (composite stock market index) and the returns of oil and energy companies traded in the stock market. The results revealed that other indices and returns have a similar variable variance structure, except for the KASE. The relevant coefficient estimation was found to be significant in both conditional standard deviation models for the KASE index. The coefficient estimate of the GARCH-M(1,1) model in the OIL index was significant, whereas conditional standard deviation models and the relevant coefficients of both conditional standard deviation models were found to be statistically insignificant in the other returns. This is an indication of the structural compatibility of Kazakhstan's stock market composite index and energy and oil companies with international markets. Furthermore, the causality analysis results showing that international indices have a causal effect on KASE and KZAP is another indicator that the Kazakhstan market works in harmony with the international markets.

The Gold Market in Vietnam: Current Situation and Solutions

The article analyzes the gold market, including supply and demand, price fluctuations, and current gold market management policies in Vietnam. The Vietnamese gold market is dominated by strict state regulations, especially the allowance for only physical gold trading and restrictions on gold imports; the monopoly of Saigon Jewelry Company (SJC) in producing gold bars further complicates the situation, creating unfair competition and limiting market development. This leads to domestic gold price fluctuations and a significant disparity between domestic and international gold prices, causing negative economic and social impacts. Based on the analysis of the current situation, the article proposes two groups of solutions for sustainable and effective market development in the future: (i) Policy and legal improvements, and (ii) Strengthening market management and supervision.

国际黄金价格的影响因素分析及短期预测

国际黄金价格的影响因素分析及短期预测

Economic Variables as an Early Warning Sign for Monitoring Construction Cost Indices – “An Empirical Study on Egypt”

The construction industry plays a crucial role in any nation's economic growth and prosperity through the implementation of the SDGs. Researchers reveal that the 17 SDGs are directly dependent by 17% and indirectly reliant by 27% on the construction industry's activities. In addition, the construction projects, whatever their type or components, continue for several years, during which many price changes and sharp economic fluctuations occur, whether at the local or international level, reflected in overall economic performance and the construction industry's health, leading to the project's cost changes and a shortage in the allocated budgets. Due to the difficulties this industry faces in reaching these goals, including the Egypt Vision 2030, we chose to look into these effects by using the ENR methodology to develop an explanatory construction cost indices model in Egypt similar to models used in other countries while making appropriate changes for the Egyptian markets. To illustrate the relationship between these selected economic variables and construction costs in Egypt and to act as an early warning sign to quantify, track, and predict the construction cost movements and trends in Egypt's construction sectors through a reliable model. A mixed research methodology consisted of semi-structured interviews with 15 industry experts and an empirical study covering 1990 through 2020 for selected local and international economic variables. We concluded that national and international economic variables significantly impacted as explanatory and predictive variables in Egypt's construction industry's cost indices; these variables are as follows: gross domestic product (GDP), consumer price index (CPI), USD to EGP exchange rate ($), inflation rate, lending rate, money supply, and unemployment rate, as well as international crude oil prices, gold prices, and copper prices. Nevertheless, further investigation is required with more economic variables across various construction industry sectors over various time intervals and different time series statistical and econometric modeling techniques.

On the Time-varying Correlations and Hedging Effectiveness: An Analysis of Crude Oil, Gold, and Stock Market

In this paper, we examine the time-varying conditional correlation between international crude oil and gold prices, along with their volatilities, and Indian stock prices, using the DCC-GARCH model. The results suggest that the relationships between stock/oil, stock/gold, stock/oil volatility, and stock/gold volatility are time-varying. We then use the conditional variance and covariance derived from the DCC-GARCH model to measure the optimal portfolio weight and hedge ratios for stock/oil and stock/gold portfolios. Our findings indicate that, to minimize risk without reducing expected returns, investors should hold 37% and 49% of oil and gold, respectively, in their portfolios, relative to stocks. However, there is wide variation in the hedge ratios over time, suggesting that portfolio managers will need to rebalance portfolios frequently. Finally, we analyze correlation coefficients under various deciles of stock market returns, showing that gold can be used as a hedge against stock market declines. Given India's significant improvement in financial indicators, the results of this study will be useful for portfolio managers, risk managers, policymakers, and researchers.

Retracted: Estimation of International Gold Price by Fusing Deep/Shallow Machine Learning

Retracted: Estimation of International Gold Price by Fusing Deep/Shallow Machine Learning

How does bubble risk propagate among financial assets? A perspective from the BSADF-vine copula model

In this paper, the BSADF method is used to construct the bubble net value sequence of 11 mainstream financial assets, and the vine copula model is used to analyze the characteristics of the bubble-related structure. First, we use the BSADF method to measure the bubbles of various financial assets. The results show that since the outbreak of COVID-19, most types of assets have experienced a sharp bubble rise and their longest bubble period as central banks have implemented quantitative easing policies. Furthermore, this article reveals the path characteristics of bubble risk transmission in different assets using the vine copula model. The R vine copula is found to be best for analyzing the tail dependence structure. The S&P 500 and the international gold price occupy the hub position in the bubble dependence structure of various financial assets. The Shanghai Composite Index and the US Dollar Index can act as relays and accelerators in the transmission of bubble risk across the financial system. Finally, we explore the tail dependence structure between financial assets. The results indicate that gold can be a good hedge against the bubble risk of the Hang Seng Index and WTI crude oil futures. The COVID-19 pandemic and accommodative monetary policies by governments can create conditions for bubble risk to spread between assets such as Bitcoin and China’s 10-year Treasury bonds and between the US Dollar Index and the S&P 500.

An Empirical Study on the Factors Influencing China's Gold Price

Since the collapse of the Bretton Woods system in 1973, the international gold price has no longer been directly linked to the US dollar, and the main factors affecting international gold have increased and become more volatile. Based on this background, gold, as a major commodity, possesses both asset and financial functional attributes. With the continuous opening of China's financial market and the introduction of a series of financial policies, the fluctuation factors affecting gold prices have become one of the topics that have been attracting attention from various parties in the industry. This paper uses Eviews software to analyze a series of variables that directly affect the gold price, and discusses how to confirm which variables are the main factors that ultimately predict the gold market price.

Linear and nonlinear asymmetric relationship in crude oil, gold, stock market and exchange rates: An evidence from the UAE

This study examines dynamic relationship among the macroeconomic variables represented by the international oil and gold prices, exchange rates and stock market index in the context of UAE's economy. The UAE is known as a major player in trading both oil and gold in the global market. Daily data for the period ranging from 19th March 2015 to 8th October 2022 is used for this study. Autoregressive distributed lag (ARDL) model is applied in both linear and non-linear specifications to explore co-movement among the variables under study. While the estimated parameters from linear ARDL model indicate the absence of any co-integration among gold, oil and stock market, the non-linear ARDL model however, does indicate and validate the presence of long-run asymmetric relation among these markets. Exchange rates play a significant role both in the short as well as in the long run. Besides, the study observes that negative shocks do have different scale of impact than the positive ones. Therefore, the present study concludes that a non-linear approach is best suited to understand the dynamics of these markets. The findings of this study have important implications for policy makers and other stakeholders as they must ensure that the direction of shocks is taken into consideration before policy prescriptions or any other investment decisions.

Rising Gold Prices but Lower Incomes for Gold Miners: Evidence on Market Imperfections from Burkina Faso during COVID-19

Abstract Although artisanal gold mining is known for human rights violations and environmental degradation, it is an increasingly important economic activity in many African countries, with a high potential to alleviate poverty. Due to increased demand for gold investment during the COVID-19 pandemic, the monthly international gold price has increased by 20% from January to May 2020. To understand how the COVID-19 pandemic has influenced gold miners, we analyse a panel survey of about 170 artisanal gold miners interviewed 2 months before the first case of COVID-19 in Burkina Faso. Follow-up surveys were done early in the pandemic and about 1 year after baseline. Various pre-existing local market failures caused local gold prices to decrease by 20%–30% from January to May 2020, when international gold prices noticeably increased. Market failures include oligopsonistic market conditions on the mines, which worsened due to travel restrictions that disrupted trading routes, reduced local traders' liquidity and made it difficult for traders to reach mines. Moreover, we find that miners have very little knowledge of international gold prices, and due to insecurity and credit constraints, they are unable to wait for local prices to recover. Once travel restrictions were lifted, the local gold price recovered close to the global gold price. To make local markets more competitive and ensure that miners benefit from rising international gold prices, governments could broadcast world gold prices on local radio, increase trading opportunities and provide access to credits for miners.

Estimation of International Gold Price by Fusing Deep/Shallow Machine Learning

In this work, we propose a new method that combines the support vector machine (SVM) and the long short-term memory (LSTM) model utilizing the theory of quotient space to predict the price of gold by leveraging the price factors that have supposedly an impact on the gold price. The Pearson correlation coefficient is employed to measure the relations between nine price factors and gold price. The five price factors with larger correlation coefficients are picked. Then, by utilizing the Granger causality test, the gold price may change concerning the two price factors when time is a concern, which results in combining the results of the correlation analysis with the results of Granger causality leading to a total of seven price factors. Also, the gold price can be divided into the quarters of the year according to the theory of the quotient space and temporal attribute. With three granularities per month, a 3-layer quotient space is constructed based on the synthesized and calculated granularities. The proposed method provides the prediction results that are compared with the predicted values of some grey models (GM) and the actual gold price, respectively. The results suggested that the prediction results of gold price have a comparable lower error measurement and perform better.

Research on the Impact of International Crude Oil and International Gold Price on China's Stock Market

This dissertation uses the VAR model to research the dynamic relationship between the Chinese stock market, global gold prices and global oil prices. To compare the changes in the correlation between the variables before the financial crisis and the variables after the financial crisis, this dissertation divides the data into two parts, namely the data after the financial crisis and the data before the financial crisis, and then We compare the data analysis of the two parts to obtain the changes in the correlation between variables after the financial crisis. We find that there is no long-term equilibrium relationship between gold, crude oil and the CSI 300 stock index of China, either after or during the financial crisis. However, this dissertation found that during the financial crisis, the relationship between variables changed. In the conclusion part, this dissertation explained the possible reasons for the changes in the correlation between variables from several aspects. At the same time, we compared the actual situation with the theoretical analysis, and we found that after the financial crisis, the actual situation and the theoretical analysis have been different. By studying the potential connections between these variables, we can better formulate policies and give better investment recommendations.