ANALYSIS OF FACTORS AFFECTING INDIAN GOLD PRICES

Abstract

Gold is an important commodity all over the world primarily because of the varied uses and applications. India is the largest consumer of gold around the world and produces only 0.05% of its total consumption. With rising prices in the last two years, studying the gold prices and identifying gold price trends has on the whole become more important and challenging. The objective of this dissertation is to develop a model to forecast the prices of Indian Gold. This is achieved by taking two set of independent variables: the exchange rates of top 10 countries from which India imports gold and macroeconomic variables like oil prices, nifty, silver prices. The model is tested in two stages: identification of currencies significant impacting the gold price and then determining the significant independent variables overall.