Domestic macroeconomic determinants of precious metals prices in developed and emerging economies: An international analysis of the long and short run

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Date
2023-07-23
Authors
Rana, Hafiz Muhammad Usman
O'Connor, Fergal
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Publisher
Elsevier
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Abstract
This study examines the relationship between domestic macroeconomic factors and domestic precious metals prices across developed and emerging markets from 1979 to 2020. The statistical characteristics of the domestic variables are not found to be consistent across countries, so that these relationships cannot be modelled in one specific way. To model each metal domestically, we use various time series techniques as dictated by the combined characteristics of the domestic variables. The findings of this analysis reveal relationships that are not consistent across countries or precious metals. No consistent set of variables is found to exist that can explain either the short or the long run determinants of domestic precious metals prices, and there is no clear divide between developed or emerging markets. Any model of the determinants of a precious metal's domestic price requires individual handling by the practitioners or academics undertaking it, rather than assuming a single set of determinants as is frequently done
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Keywords
Precious metals prices , Long-run equilibrium , Inflation , Unemployment , Emerging markets
Citation
Rana, H.M.U. and O’Connor, F. (2023) ‘Domestic macroeconomic determinants of precious metals prices in developed and emerging economies: An international analysis of the long and short run’, International Review of Financial Analysis, 89, 102813 (13 pp). https://doi.org/10.1016/j.irfa.2023.102813.