A study on gold price performance relation among the countries of US, India, Canada and Australia

The study depends on the secondary data for sixteen years 2003 to 2018 of percentage of performance of Gold prices among the countries like America, Australia, Canada and India.

Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=1

Journal Impact Factor (2019): 9.6780 (Calculated by GISI) www.jifactor.com

ISSN Print: 0976-6502 and ISSN Online: 0976-6510

© IAEME Publication Scopus Indexed

A STUDY ON GOLD PRICE PERFORMANCE RELATION AMONG THE COUNTRIES OF US,

INDIA, CANADA AND AUSTRALIA

Dr Rajalakshmi.K

Head of the Department, Department of Commerce (Accounting & Finance) Shri SSS Jain College for Women, Tamilnadu, Chennai, India

ABSTRACT

The Study of different forms of Investment plays a major role in economic Investments Among the economic Investments Gold also plays a major role in certain countries Gold is one of the precious yellow metals in the world and one of the major investment options by many of the countries Many of the Countries prefer various sources of Investment opportunities, but the countries like India prefer Gold as best source of investments compared to the other avenues Like the up trends and down trends in the stock market Gold markets also have its own performance of price hike

or down or standard Moreover there is always preference for Gold as an option to invest by Indian investors and also due to the essential need for certain events The study depends on the secondary data for sixteen years 2003 to 2018 of percentage of performance of Gold prices among the countries like America, Australia, Canada and India The study is done on casual research basis to know is there any relation between the said countries with the performance of price rate of Gold It is found that there is statistically significant relation between US and India also among Australia and India in Gold price fluctuations

Keywords: Gold, Safe heaven, USD (US Dollar), AUD (Australian Dollar), CAD (Canadian Dollars), INR (Indian Rupee), Gold Price

Cite this Article: Dr Rajalakshmi.K, A Study on Gold Price Performance Relation

among the Countries of US, India, Canada and Australia, International Journal of

Management (IJM), 11 (1), 2020, pp 138–144

http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=1

1 INTRODUCTION

Among the various investment avenues like share market, Real estates, Insurance, Bank deposits and others, Gold plays a most important role in the consumer market that impacts the reserves all over the country At times when equity falls, gold acts as a form of insurance to buy; therefore Gold is viewed as a stock market hedge With the latest shot in Trump’s trade

heaven’ In fact, what Gold does is very little and it does not even rust While other assets performing well, this would have underperformed This is because rather to grow it, Gold is a form of asset to store value, in the form of Jewelry to the people, coin or reserves by the banks and apex bank Adrian Ash, the director of research at Bullion Vault, the online leader for private investors in physical precious metals analyzed and started investing in Gold since

2001, especially for physical gold and silver utilized by private investors online They launched in 2005 after two years of development in Information technology and could able to store 2 billion in US $ of Gold, Silver, Platinum and other precious metals

2 NEED OF THE STUDY

The metals like Diamond, Platinum, Gold, Silver plays an important role in consumer market and also impacts the stock market fluctuations Gold is one of the precious metals among other metals in the world and there is always high demand for such commodities in certain countries

3 OBJECTIVE OF THE STUDY

 To study the performance relation of Gold price among countries like Australia with India,

Canada and United States

 To study the performance relation of Gold price among countries like United States with

India, Canada and Australia

 To Study the performance relation of Gold price among countries like Canada with Australia,

United States and India

 To Study the performance of Gold price among countries like India with United States,

Australia and Canada

4 RESEARCH METHODOLOGY

4.1 Data Collection

The data collected is used as casual research to come across the quantitative relation between price performance of Gold from three different countries and the study completely depends only on Secondary source of information like Internet, Journals, and books

4.2 Research Tools

Hypothesis I:

H0: There is no significant relationship between Gold Price Performance in countries like Australia with India, Canada and United States

Hypothesis II:

H0: There is no significant relationship between Gold Price Performance in countries like United States with India, Canada and Australia

Hypothesis III:

H0: There is no significant relationship between Gold Price Performance in Canada with Australia, United States and India

Hypothesis IV:

H0: There is no significant relationship between Gold Price Performance in countries like India with United States, Australia and Canada

4.3 Tools and Technique

Comparative analysis with three different countries has been done with the parameters mean, standard deviation and correlation Further the study is done to analyse the performance of Gold price between India, Australia, Canada and US countries Statistical package for the analysis of quantitative data using correlation, mean and standard deviation is used for the study

5 REVIEW OF LITERATURE

The Hindu Business Line (2011), According to the study by Dubai Chamber of Commerce and Industry, a study was conducted based on (DMCC) Dubai Multi commodities centre and

it interprets that the increased use of Gold in making Jewelry in growing markets such as

India and China has pushed the prices of Yellow metal

Ram sahgal(July 3, 2017), There was a huge confusion over the old gold rates exchange for the new ornaments they had a burden of 3% GST on gold and 5% on their making charges Their confusion did not affect with buying new jeweler which attracts 3% While purchasing a new gold it charges 3% so they exchange their old gold and buy new which they

have to pay reverse 3% to the government

Surendra Mehta (August 2, 2017), the demand of the gold is definitely considered while fixing the rates As there is 1% excise duty and 1.2% VAT and 10% customs duty which comes to 12.43% so here the jewelry comes to 3.24% that is the win for gold jewelers Dr.Sindhu (2013) conducted a study on impact of select factors on the price of Gold and found that the factors like US dollar value, crude oil prices, repo rate and inflation all impacts the price fluctuations of gold price

The Hindu Business Line (2011), the world health estimates that jewelry and investment demand from the Asian countries represented about 40 percent of the total global demand in

2010, this gives the expectation of demand for Gold to get raised

World Gold council (2018), Indian jewelry saw a sharp fall downturn in first quarter falling 12% y-o-y to 87.7t and that was the third weakest quarter for ten years in India’s

jewelry market as a rupee magnified the rise in US gold price at international level

Janitha.M.L and Madhushree H.G, a study conducted on impact of GST on Gold sector and found that though Gold price a bit hike in India doesn’t have a greater impact on sale and purchase of gold, in continuous with the fondness towards precious yellow metals by the

Indians

6 CAUSES THAT AFFECTS THE PRICES OF GOLD IN INDIA

 The International scenario of Gold price fluctuations make it clear that gold acts as a Safe

heaven

 Fluctuations in currency holdings due to demonetization and fluctuations in currency rates

 The application of demand and Supply mechanics affecting the quantity of Gold mined in a year

 People swing their minds to invest in Gold or other form of assets, whenever the performance

in financial markets is unfavorable or weak,

 Comparatively Gold is preferred much better than the other form of assets as the volatile

behavior of stock market impacts in Gold price

 Unstable Price level of Gold is also caused by the rising inflation and the interest rates of RBI

 Migration of People from rural to urban cities and increase in the standard of Living of people

also acts the hidden factor

 Tax systems, customs and Festival beliefs also acts as the factors of price fluctuations in Gold

 Demand for Gold as a reserves and hedge against inflation and intention of profit based on the

upcoming trends

7 ANALYSIS AND INTERPRETATION

The analysis includes Pearson’s correlation among the four preferred countries and simple Trend with Graphical representation for different consecutive years

Figure 1

The Figure 1 interprets the relation between annual price performance in countries like

India, Canada, Australia and US in the Gold price performance rate

7.1 Correlation Analysis of Gold Price Performance in Australia with India, US and Canada

Table 1

deviation

AUD

Pearson

Correlation 0.706** 0.483 0.851**

AUD =7.3250 AUD=12.51769 Sig

** Correlation is significant at the 0.01 level (2-tailed)

The table 1 clearly shows that P>0.01 and therefore the null hypothesis with no significant relationship between Gold Price Performance in Australian Country and US country is accepted and therefore there is insignificant relationship between Gold Price Performance in Australian Country and US country It also shows that there is significant relationship

-100

-50

0

50

100

150

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

INR CAD AUD USD

between Gold price performance in Australian Country with that of Indian Country and Canadian Country

7.2 Correlation Analysis of Gold Price Performance in United States with India, Australia and Canada

Table 2

deviation

USD

Pearson

Correlation 0.768** 0.483 0.634**

AUD =9.4062 AUD=15.71804 Sig

** Correlation is significant at the 0.01 level (2-tailed)

The table 2 clearly shows that P>0.01 and therefore the null hypothesis with no significant relationship between Gold Price Performance in US Country and Australian country is accepted and therefore there is insignificant relationship between Gold Price Performance in

US Country and Australian country It also shows that there is significant relationship between Gold price performance in US Country with that of Indian Country and Canadian Country

7.3 Correlation Analysis of Gold Price Performance in Canada with India,

Australia and United States

Table 3

deviation

CAD

Pearson

Correlation 0.816** 0.851** 0.634**

CAD =7.9125 CAD=12.31784 Sig

** Correlation is significant at the 0.01 level (2-tailed)

The table 3 clearly shows that P>0.01 and therefore the null hypothesis with no significant relationship between Gold Price Performance in US Country and Australian country is rejected and therefore there is significant relationship between Gold Price Performance in Canadian Country with Indian, US and Australian country

7.4 Correlation Analysis of Gold Price Performance in India with United States, Australia and Canada

Table 4

deviation

INR

Pearson

Correlation 0.768** 0.706** 0.816**

INR =11.7813 INR=13.38876 Sig

The table 4 clearly shows that P>0.01 and therefore the null hypothesis with no significant relationship between Gold Price Performance in Indian Country with US, Australian country and Canadian country is rejected and therefore there is significant relationship between Gold Price Performance in India with that of US Country and Australian country and Canadian country

8 FINDINGS

The study clearly depicts that there is a relation with the performance of price fluctuation of Gold in US with Indian and Canadian country There is a relation in price fluctuation of Gold

in Australian with Indian and Canadian countries The Study also interprets that there is relation in price fluctuation in India with US, Canada and Australian countries Though the investors differs in their Geographical regions, culture, attitude, tastes and preferences, life styles, Food habits, behavior and their perceptions the study finds that there is some relation between those countries that impacts the performance of such price levels The study also interprets that there is an insignificant relation between the performance of price fluctuation of Gold in Australian and United States countries

9 CONCLUSION

The Customers are heterogeneous in on various aspects and there might meager uniformity in their preferences While Gold is viewed as a best investment avenue by many of the countries like US, Australia and other countries, it is an auspicious preferred yellow metal by certain countries like India, Malaysia and many other Asian countries From the study it can be concluded that though investors vary on geographical, customs and life styles there are some relation among these counties as there is a rise and fall in the Gold prices Further research is also recommended as to the hidden factors that impacts the preference of Gold prices in different seasons among different countries

REFERENCES

[1] The Hind Business Line, “Jewellery investment demand pushing Gold prices: Study”

Dubai, July 2017

[2] Dr Sindhu, “A Study on impact of select factors on the price of Gold”, IOSR Journal of

business and management, march-april 2013, pp:84-93

[3] Ram sahgal, Confusion over tax on gold exchange, 2017

[4] World Gold council “Gold Demand Trends Q1 2018”

www.ft.com/content/a9070f24-39a3-11e8-8b98-2f31af407cc8

[5] Dr K Rajalakshmi, “A study of Gold Price Performance relation among US, India and

Australia”, Knowledge Economy, Peer reviewed half yearly Journal, Vol.8, Issue 16,

2018, pp:16-21

[6] Surendra Mehta, 3% GST on gold: The yellow metal will continue to shine; jewelers

rejoice, 2017

[7] Janitha M.L and Madhushree H.G, “A Study on Impact of Goods And Services Tax on

Gold Sector”, IOSR Journal of Business and Management, pp:01-03

[8] E Priyadarshini and Dr A Chandra Babu, An Analysis of Stability of Trends in Gold

Prices Using Fractal Dimension Index (FDI) Computed From Hurst Exponents,

International Journal of Management (IJM), 1 (2), 2010, pp 9–13

[9] www.gold.org

[10] www.investopedia.comwww.wickipedia.com

[11] www.bseindia.com

[12] www.moneycontrol.com

[13] www.goldprice.org