International Journal of Social Science & Economic Research
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Title:
RELATIONSHIP BETWEEN GOLD AND STOCK MARKET POST-2008 CRISIS: A STUDY IN INDIAN CONTEXT

Authors:
Aanya Jain

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Aanya Jain
Sarla Anil Modi School of Economics, NMIMS University, India

MLA 8
Jain, Aanya. "RELATIONSHIP BETWEEN GOLD AND STOCK MARKET POST-2008 CRISIS: A STUDY IN INDIAN CONTEXT." Int. j. of Social Science and Economic Research, vol. 6, no. 9, Sept. 2021, pp. 3422-3449, doi.org/10.46609/IJSSER.2021.v06i09.024. Accessed Sept. 2021.
APA 6
Jain, A. (2021, September). RELATIONSHIP BETWEEN GOLD AND STOCK MARKET POST-2008 CRISIS: A STUDY IN INDIAN CONTEXT. Int. j. of Social Science and Economic Research, 6(9), 3422-3449. Retrieved from https://doi.org/10.46609/IJSSER.2021.v06i09.024
Chicago
Jain, Aanya. "RELATIONSHIP BETWEEN GOLD AND STOCK MARKET POST-2008 CRISIS: A STUDY IN INDIAN CONTEXT." Int. j. of Social Science and Economic Research 6, no. 9 (September 2021), 3422-3449. Accessed September, 2021. https://doi.org/10.46609/IJSSER.2021.v06i09.024.

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Abstract:
Despite being the second-largest consumer of gold in 2020, the true characteristics of gold remain in question in India. Does gold truly act as a safe haven? What is the current relationship between gold and the stock market? How does this relationship change pre-crisis and post-crisis? The year 2020 has seen gold price reach an all-time high of INR 57,008 per 10 grams with the recent COVID- 19 outbreak. The importance of education in investing is enormous. The study examines the dynamic relationship between gold prices and the stock market index in India for the period between 1 February 2009 and 1 February 2021. Secondary data is obtained from World Gold Council and Yahoo Finance. Karl Pearson's correlation coefficient suggests a significantly positive correlation between the variables. Being integrated of order 1 as per Augmented Dickey-Fuller Test, Johansen's cointegration test and Granger Causality test are applied. It is observed that there exists a long-run relationship between the variables with stock market returns causing the gold returns. Sub-dividing the period under study into pre- and postcrisis period concerning the COVID-19 crisis, it is inferred that gold does act as a safe haven in times of uncertainty and market downfall.

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