Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence
Recurrent stock market fall and rise sequel by COVID-19, rising global inflation, increase in Fed interest rates, the unprecedented meltdown of technology stocks, fear of trade wars, tightening of governments’ fiscal policies call for a new trend in international investing. It is time for the invest...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-12-01
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| Series: | International Journal of Financial Studies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7072/11/1/8 |
| _version_ | 1797858403911991296 |
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| author | Sumathi Kumaraswamy Yomna Abdulla Shrikant Krupasindhu Panigrahi |
| author_facet | Sumathi Kumaraswamy Yomna Abdulla Shrikant Krupasindhu Panigrahi |
| author_sort | Sumathi Kumaraswamy |
| collection | DOAJ |
| description | Recurrent stock market fall and rise sequel by COVID-19, rising global inflation, increase in Fed interest rates, the unprecedented meltdown of technology stocks, fear of trade wars, tightening of governments’ fiscal policies call for a new trend in international investing. It is time for the investors to rethink, rebalance and reset their investment strategies to position and protect their portfolios during and post-pandemic period. This paper attempts to forecast the gold prices for the post-pandemic era and explores whether gold will serve as a decisive hedge during this transition period. The techniques of ARCH, GARCH, E-GARCH, A-PARCH, and GARCH-M is employed in forecasting the conditional volatility of gold spot price from Multi Commodity Exchange (MCX) of India. A total of 3631 observations were collected from the daily spot prices of gold from January 2009 to December 2022. The findings show that the gold prices in India are highly persistent similar to other emerging markets and that gold will remain a safe haven for investors and institutional investors in the post-pandemic period. This paper is the first of its kind to forecast gold prices for the post-pandemic period. The forecast price of 10-gram gold is expected to trade for 65,948 ₹ in the Indian MCX by 2026 if the gold prices behold its previous momentum. This forecast will help the investors to plan their portfolio diversification for the post-pandemic period. |
| first_indexed | 2024-04-09T21:12:49Z |
| format | Article |
| id | doaj.art-468f6b15f4ee4d3fa9467ce9eafca7ae |
| institution | Directory Open Access Journal |
| issn | 2227-7072 |
| language | English |
| last_indexed | 2024-04-09T21:12:49Z |
| publishDate | 2022-12-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | International Journal of Financial Studies |
| spelling | doaj.art-468f6b15f4ee4d3fa9467ce9eafca7ae2023-03-28T13:47:20ZengMDPI AGInternational Journal of Financial Studies2227-70722022-12-01118810.3390/ijfs11010008Will Gold Prices Persist Post Pandemic Period? An Econometric EvidenceSumathi Kumaraswamy0Yomna Abdulla1Shrikant Krupasindhu Panigrahi2Economics and Finance Department, College of Business Administration, University of Bahrain, Sakhir P.O. Box 32038, BahrainEconomics and Finance Department, College of Business Administration, University of Bahrain, Sakhir P.O. Box 32038, BahrainEconomics and Finance Department, College of Business Administration, University of Bahrain, Sakhir P.O. Box 32038, BahrainRecurrent stock market fall and rise sequel by COVID-19, rising global inflation, increase in Fed interest rates, the unprecedented meltdown of technology stocks, fear of trade wars, tightening of governments’ fiscal policies call for a new trend in international investing. It is time for the investors to rethink, rebalance and reset their investment strategies to position and protect their portfolios during and post-pandemic period. This paper attempts to forecast the gold prices for the post-pandemic era and explores whether gold will serve as a decisive hedge during this transition period. The techniques of ARCH, GARCH, E-GARCH, A-PARCH, and GARCH-M is employed in forecasting the conditional volatility of gold spot price from Multi Commodity Exchange (MCX) of India. A total of 3631 observations were collected from the daily spot prices of gold from January 2009 to December 2022. The findings show that the gold prices in India are highly persistent similar to other emerging markets and that gold will remain a safe haven for investors and institutional investors in the post-pandemic period. This paper is the first of its kind to forecast gold prices for the post-pandemic period. The forecast price of 10-gram gold is expected to trade for 65,948 ₹ in the Indian MCX by 2026 if the gold prices behold its previous momentum. This forecast will help the investors to plan their portfolio diversification for the post-pandemic period.https://www.mdpi.com/2227-7072/11/1/8forecastinggold priceCOVID-19GARCHtime series |
| spellingShingle | Sumathi Kumaraswamy Yomna Abdulla Shrikant Krupasindhu Panigrahi Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence International Journal of Financial Studies forecasting gold price COVID-19 GARCH time series |
| title | Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence |
| title_full | Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence |
| title_fullStr | Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence |
| title_full_unstemmed | Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence |
| title_short | Will Gold Prices Persist Post Pandemic Period? An Econometric Evidence |
| title_sort | will gold prices persist post pandemic period an econometric evidence |
| topic | forecasting gold price COVID-19 GARCH time series |
| url | https://www.mdpi.com/2227-7072/11/1/8 |
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