Historical Events and the Gold Price

Shubhasis Dey ()
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Shubhasis Dey: Indian Institute of Management Kozhikode

No 198, Working papers from Indian Institute of Management Kozhikode

Abstract: Gold prices are quick to respond to world events. However, some of these events stand out, in the sense that they have had significant influence on the conditional mean and volatility of gold prices. In this paper, we have taken 30 historical events ranging from the suspension of dollar’s convertibility into gold in August 1971 to the end of the Quantitative Easing in the US in October 2014 and studied their impact on real gold prices. We find that the US economy and the current dollar-based monetary system is still the main driver of real gold prices. Our empirical exercise in this paper finds that the mean and variance of real gold prices have experienced significant changes primarily when the historical events in question either reinforced or challenged the economic dominance of the US and the role of dollar in the global monetary system.

Keywords: Gold prices; historical events; hedge; safe haven (search for similar items in EconPapers)
JEL-codes: C52 C58 E4 G1 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2016-05
New Economics Papers: this item is included in nep-his, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:iik:wpaper:198

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