Global and Local Determinants of Gold Prices: Insights from the US, India, and China

Abstract

The abstract should briefly summarize the main points of the paper, including the research question or objective, the methods used, and the major findings. It should be between 150 and 250 words.

Bullion products, particularly gold, are highly valued precious metals traded in both physical and financial forms. Recognised as a safe haven asset, gold tends to retain or even appreciate in value during periods of economic uncertainty. The price of gold is influenced by numerous factors, including supply and demand, economic conditions, and investor sentiment. Among these, economic conditions play a crucial role, significantly impacting the demand for gold. This paper investigates the relationship between economic conditions and the price of gold in a cross-country context, utilising a panel data set from three countries over the period 2014-2023. The study's findings reveal a reciprocal interdependence between gold prices in the United States and India. These insights have profound implications for investors and policymakers. Investors should recognise that gold prices are likely to rise during periods of economic instability and inflation. Policymakers, on the other hand, should acknowledge gold's role in the financial system and implement measures to mitigate potential risks associated with its volatility.