ISSN: 2225-8329
Open access
The price of gold in Malaysia has risen since the beginning of 2019, as investors seek safe havens against oncoming economic instability. Investors believe of gold is a financial asset that can hedge its value against inflation, therefore it's crucial for them to be mindful of recent changes in the gold price.
This study aims to investigate the new variables that may affect the price of gold in Malaysia. The variables included in this study are consumer price, commodity price, housing price, and stock price. Due to the addition of two additional factors which are housing prices and commodity prices that are important to gold prices, this study varies from previous ones.
In this study, the correlation coefficient was utilised to examine the relationship between variables, and multiple linear regression was performed to identify the factors influencing the price of gold. E-Views 6.0 was used to analyse the data. The findings indicated that consumer price, commodity price, and housing price in Malaysia were significantly correlated with the gold price. Stock price, however, indicated differently. Future studies should ideally have a broader scope and consider the importance of housing and commodities prices as independent variables or causes. To aid investors in estimating their expected returns, future research should examine the gold price across both short-term and long-term time horizons.
References
Amira, N. E. (2013). The Relationship between Macroeconomic Variables and Gold Price in Malaysia. Prosiding Perkem VIII, Jilid 3 (1413-1421).
Bhunia, Amalendu., and Das, A. (2012). Association between Gold Prices and Stock Market Returns: Empirical Evidence from NSE. Journal of Exclusive Management Science, Vol. 1(2).
Bishnoi, R., and Lan, J. (2014). An Empirical Analysis of Factor Affecting Gold Prices. International Journal of Hepatobiliary and Pancreatic Diseases, Vol. 3(2).
Cutler, J., Chan, C., and Li, U. (2005). The Relationship between Commodity and Consumer Prices in Mainland China and Hong Kong.Hong Kong Monetary Authority Quartely Bulletin, 16-31.
Habibu, S. (2020). Gold in Demand Despite Record Price. https://www.thestar.com.my.
August,8.
Hanif, Z., Nabilah, A. S., Salwani, A., and Mansor, W. M. (2015). Factors Affecting the Price of Gold in Malaysia.Journal of Basic and Applied Scientific Research, 5(7), 41-46.
Lee, E. (2020). Jewellers Shine Amid Gold Rush. https://www.theedgemarkets.com. August 12.
Leung, C. K. Y., Shi, S., and Tang, E. (2013). Commodity House Prices.Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute.Working Paper, No. 154.
Mamcarz, K. (2015). Determinants of the Price of Gold in Short Term. Finanse, Rynki Finansowe, Ubezpieczenia, N.74. pp.1-11
Nangolo, C., and Musingwini, C. (2011). Empirical Correlation of Mineral Commodity Prices with Exchange-Traded Mining Stock Prices. The Journal of the Southern African Institute of Mining and Metallurgy, Vol. 111.
Norhafiza, N., Sabariah, N., and Rusmawati, I. (2014). The Impact of Commodity Prices, Interest Rate and Exchange Rate on Stock Market Performance: An Empirical Analysis from Malaysia. Malaysian Management Journal, Vol. 18, pp. 39-52.
Omag, A. (2012). An Observation of The Relationship Between Gold Prices and Selected Financial Variables in Turkey.
Ong, T. S. (2013). Factors Affecting the Price of Housing in Malaysia.Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB), Vol.1, No. 5 (May., 2013).
Pindyck, R. S. (2004). Volatility and Commodity Price Dynamics.The Journal of Futures Markets, Vol. 24, No. 11, pp. 1029–1047.
Rudrakanchana, N. (2013). Connection between US interest rate and gold prices is looser, and less important than investors think. World gold council. http://www.ibtimes.com/connection-between-us-interest-rates-gold-prices-looser-less-important-investors-1366691.
Smith, G. (2002). London Gold Prices and Stock Price Indices in Europe and Japan.
Sharma, S. S. (2016). Can the consumer price index predict gold price returns? Economic Modelling, Elsevier, vol. 55(C), pages 269-278.
In-Text Citation: (Baharuddin et al., 2022)
To Cite this Article: Baharuddin, N. S., Khalid, C. W. K., Salim, N. J., & Manaf, S. M. A. (2022). Alternative Variables Drive the Price of Gold. International Journal of Academic Research in Accounting Finance and Management Sciences, 12(3), 581–588.
Copyright: © 2022 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode