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Factors Affecting Gold Price in Malaysia

In: Business and Management

Submitted By alhidayah
Words 3969
Pages 16
J. Basic. Appl. Sci. Res., 5(7)41-46, 2015
© 2015, TextRoad Publication

ISSN 2090-4304
Journal of Basic and Applied
Scientific Research www.textroad.com Factors Affecting the Price of Gold in Malaysia
Hanif Zakaria, Nabilah Abdul Shukur, Salwani Affandi,
Wan Mansor Wan Mahmood
Faculty of Business Management
Universiti Teknologi MARA, Dungun, Terengganu, Malaysia
Received: March 9, 2015
Accepted: June 16, 2015

ABSTRACT
Gold is a precious metal which serves as both financial and real assets. The value of gold in the society goes more than just economic, as it is also treasured as a storage and display of mammon and culture.Of late, the price of gold is not stable in which it tends to oscillatecontingent on the economic condition. In the long-run, its prices keep increasing due to high demand and inadequate supply worldwide. However, in the short-run, its price seems to be volatile due to various potential reasons. Therefore, this study was conducted to determine the factors influencing gold prices in Malaysia. In order to achieve the objective, Stata software was used to assess the prospective relationships between the gold prices as the dependent variable and the inflation rate, interest rate and exchange rate as independent variablesby using Pooled Ordinary Least Squares (POLS) methodology. The monthly data employed in this study spans across a 14 years period from year 2000 until 2013. The results revealed that the rates of inflation, exchange and interest were significantly related with gold prices in Malaysia in different magnitude and direction.It is empirically proven that any change in the rates of these three variables will likely pose a change of gold prices in the country.The results also solidify the importance of gold as a store of wealth and portfolio construction. KEYWORDS:Gold prices, Exchange Rate, Inflation Rate,

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