The Empirical Research Of Usd Monetary Policy Impact On The Price Of Gold

Since the collapse of the Bretton Woods system, the price of gold began tomarket-oriented, resulting in more and more factors influence changes in the price ofgold, the price volatility increased significantly. While the price of gold or in dollars,which means that the monetary policy of the U.S. dollar is still the price of gold has adecisive influence. The United States since the technology bubble burst in2000, theU.S. Government to implement a long-term expansionary monetary policy and cutinterest rates13consecutive times. Gold is a store of value in times of crisis in aneffective means of dialysis dollar monetary policy and the relationship of the volatilityof the price of gold on the gold market regulation effect of China’s gold-control andinvestor choice is helpful.Firstly, through the theoretical pricing model on the price of gold, analyzed andselected three indicators of monetary policy affect the price of gold: the money supply,the federal funds rate, the dollar index. Then in1996January to2011December data,using MS-VAR model and impulse response analysis based on the influence ofmonetary policy under different regimes on the price of gold zone system.Through empirical research, we can get the following findings: the price of goldthe whole wave system has two district, District1as the price of gold in a period offalling, and monetary policy in a fairly loose; District2for gold prices in a risingperiod, and monetary policy in general liberal state. The zone system impulseresponse analysis concluded that: in the two regimes of monetary policy tools on theprice of gold has some effect, but the effect of different.The money supply has apositive impact on the price of gold, but the effect in different areas under the effect ofdifferent, mainly in the influence of time. US interest rates impact on gold prices indifferent regions under the system performance but on the contrary, mainly in thedirection of effect, and the price of gold and the federal funds rate is complex, thelong term negative relationship. The dollar index has a negative impact on the price ofgold, but the effect on gold price effect is also different in different zone system.In view of the above research, put forward the following policy and investmentadvice: the rise in gold prices, government regulation and investor attention indicatorsshould first$money supply, then the dollar index, finally for the US dollar interest rate. In the gold price falls, government regulation and investor attention index itshould first for US interest rates, followed by the US currency supply, the dollarindex.