Analysis of Macroeconomic Factors Affecting Global Gold Prices: A Multiple Linear Regression Study
Abstract: This thesis examines the correlation between some macroeconomic factors andthe monthly difference in gold price with the objective of examining if, and towhat extent they are related. This is done with the ambition to identify the mostinfluential drivers affecting the change in gold price. Multiple linear regression isused to model the relationship between the response variable, monthly change ingold price, and 13 regressor variables considered to be influential macroeconomicfactors on the gold market. The predictor variables include measures likeinflation, money supply and bond rates. A final model is obtained, identifying the most significant regressor variablesto be USDX, EU CPI, China CPI, US Money Supply, Gold Futures, US 10yeargovernment bond yields and Gold Ores PPI. The plausibility of the resultsare discussed based on previous studies, macroeconomic theory and possibledelimitations. The thesis also provide suggestions for further studies on topicsnot covered in the study.
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