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GOLD & STOCK RELATION: INVESTORS REACTION DURING COVID-19 OUTBREAK

Subrata Roy
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Subrata Roy: Mahatma Gandhi Central University Motihari

Revista Economica, 2020, vol. 72, issue 3, 103-126

Abstract: This research tries to examine the association between stock and gold during COVID-19 pandemic along with investors' investment preference during COVID-19 lockdown by considering three macroeconomic variables (BSE, NSE & Gold) with their daily data over a period from 30th January 2019 to 31st July 2020 under VAR environment. The time series data are normally distributed and stationary after first difference with same order of integration without co-integrated equations with optimum lag length one. The long run equilibrium relationship is absent during COVID-19 outbreak but short run association is found when lagged gold price influences gold itself. Furthermore, two-way Granger responses exist between BSE and NSE only. The investors prefer stock investment as compared to gold during COVID-19 lockdown. Finally, the VAR models are valid and stable based on various residuals tests.

Keywords: Co-integration; VAR; COVID-19; Gold; BSE; NSE (search for similar items in EconPapers)
JEL-codes: C12 C15 C32 (search for similar items in EconPapers)
Date: 2020
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