Monetary Research Center

26/2022 Gold Jewelry Demand Effects on Gold Price: Evidence from China and India
Issued in Thursday, August 25, 2022
This paper analyzes the effects of Chinese and Indian demand for gold jewelry on global gold prices using quarterly data from 2010-2022. Granger causality between Chinese and Indian demand for gold jewelry on gold price is tested with a lag of one quarter. The causality results show that changes in gold jewelry demand in China Granger cause changes in gold price. The most complete regression does not show that the magnitude of these changes, however, are statistically significant. The regression indicates that a 1% change in Chinese demand results in a 0.042% decrease in price. Furthermore, demand in India is not shown to Granger cause changes in the gold price, nor is its magnitude in regressions proven to be statistically significant.  
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