Gold price volatility and its determinants: evidence from world leading gold-producing nations
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The objective of the study is to determine the factors affecting gold price volatility in the world leading gold producing countries. The study used panel data ranging from 2014 to 2023 of 5 gold producing countries, Australia, Canada, China, Ghana, and the United States. Using a fixed effect panel model’s results indicated that in the short-term, inflation rate (IR), consumer price index (CPI), and crude oil price (COP) significantly affect gold price (GOP). In the long-term, only COP has a bidirectional and a unidirectional granger causality with exchange rate (EXR), gasoline price (GP), and inflation rate (IR) with GOP. The ex-post forecast for 5 gold producing countries’ gold prices show an increasing trend. Gold price volatility creates economic, social, and environmental risks that undermine sustainable development in producing nations. Addressing these challenges requires to ensure long-term stability and inclusive economic growth.
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