An Empirical Analysis Of The Gold Price Fluctuation

Gold has been a symbol of wealth since ancient times. Since the collapse of the Bretton woods system which is famous for double hook system in the1970s, gold price fluctuates dramatically. More and more international gold, central Banks, commercial Banks, gold ETF and individual investors put gold as one of the most important asset.Gold has commodity, currency and financial attributes. These three attributes determine the diversity and complexity of the gold price fiuctuations.This article analyzes the above three attributes andthe transmission mechanism of the gold price from the international geopolitical, the international economic situation, the international financial situation and the investment market.We found that:(1) If the international geopolitical will be instability, the gold prices will rise because of its not debt and investment hedge attributes.(2) If the American economic situation is not optimistic, the prices and money supply will fluctuate dramatically, gold prices will rise at that time.(3) If the American financial situation is not stable, the dollar will be in pressure, and the gold which is priced in U.S. dollar will rise.(4) In the international investment market,the distribution of funds will affect the price of gold. These four factors is distinct and influence each other, therefore, when we analyzes the gold price, we must pay attention to the leading factors.In the empirical analysis, we choose gold price as explained variable, we choose the values of K Marshall which is combined with10countries, the unemployment rate in the United States and the consumer price index of the United States as explaining variables. We test the stationary for each variables, and test co-intcgrationof the regression residual. Finally, we build VAR model and get the conclusion that the explaining variables can affect gold prices.