International Journal of Management (IJM)

Volume 11, Issue 1, January 2020, pp. 138–144, Article ID: IJM_11_01_014
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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
war, the stock market falling hard has given a way to think of buying some kind of ‘safe

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 Dr. Rajalakshmi.K

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.

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A Study on Gold Price Performance Relation among the Countries of US, India, Canada and Australia

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
price level.

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 Dr. Rajalakshmi.K

 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.

150

100

50 INR
CAD
AUD
0 USD
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

-50

-100

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
Mean Standard
INR USD CAD
deviation
Pearson
0.706** 0.483 0.851**
Correlation
AUD =7.3250 AUD=12.51769
AUD Sig. (2-
0.001 0.058 0.000
tailed)
N 16 16 16

**. 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

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A Study on Gold Price Performance Relation among the Countries of US, India, Canada and Australia

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
Mean Standard
INR AUD CAD
deviation
Pearson
0.768** 0.483 0.634**
Correlation
AUD =9.4062 AUD=15.71804
USD Sig. (2-
0.001 0.058 0.008
tailed)
N 16 16 16
**. 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
Mean Standard
INR AUD USD
deviation
Pearson
0.816** 0.851** 0.634**
Correlation
CAD =7.9125 CAD=12.31784
CAD Sig. (2-
0.000 0.000 0.008
tailed)
N 16 16 16
**. 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
Mean Standard
USD AUD CAD
deviation
Pearson
0.768** 0.706** 0.816**
Correlation
INR =11.7813 INR=13.38876
INR Sig. (2-
0.001 0.002 0.000
tailed)
N 16 16 16
**. Correlation is significant at the 0.01 level (2-tailed).

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 Dr. Rajalakshmi.K

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

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A Study on Gold Price Performance Relation among the Countries of US, India, Canada and Australia

[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

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