About the dataset: When inflation is higher, ultimately interest rate is also higher to control

inflation because of the dollar index. Now, inflation is going down which affects the dollar index
due to which is going down and the interest rate also decreases. All 3 independent variables are
directly related. Gold prices are inversely related to all 3 independent variables.
Inflation is the main issue. Inflation is directly related to interest rates and the dollar index.
Inflation is inversely related to gold prices.

Performing Regression on Excel:

Regression Equation Y= b0 + b1x1+b2x2+b3x3

Calculated Regression Eq y=1985.87234-69.8480243x1-31.8297872x2+5.817629179x3

Regression Statistics:

Multiple R (Correlation Coefficient): It shows a very high correlation (close to 1) between the
predictors (independent variables) and the gold prices.

R-Square (Coefficient of Determination): Around 99.35% of the variability in gold prices is

explained by the independent variables in this model. It indicates an excellent fit.

Adjusted R-Square: Adjusts the R-squared value for the number of predictors in the model. It
suggests that approximately 98.86% of the variability in gold prices is explained by the
independent variables adjusted for the model's complexity.

Standard Error: Represents the average distance that the observed values fall from the
regression line. A smaller standard error indicates a better fit of the model. In this case, it’s
10.9211.

ANOVA (Analysis of Variance):

The F-statistic of 203.10 with a very low p-value (7.95816E-05) suggests that the overall model
is statistically significant.
Coefficients:
Each independent variable's coefficients along with their standard errors, t-statistics, and p-
values are presented here.

Intercept: The estimated intercept of the regression equation is 1985.8723.

Inflation: The coefficient is -69.8480. A one-unit increase in inflation is associated with a

decrease of 69.8480 units in gold prices, holding other variables constant. Its p-value (0.0898)
suggests some significance but not at a conventional significance level (e.g., 0.05).
Interest Rates: The coefficient is -31.8298. A one-unit increase in interest rates is associated
with a decrease of 31.8298 units in gold prices, holding other variables constant. Its p-value
(0.7760) indicates lack of significance.

Dollar Index ($): The coefficient is 5.8176. A one-unit increase in the dollar index is associated
with an increase of 5.8176 units in gold prices, holding other variables constant. Its p-value
(0.7463) also suggests a lack of significance.

Interpretation:
The model seems to have an excellent overall fit, explaining a high percentage of the variability
in gold prices.
Inflation appears to have a relatively lower p-value, hinting at a potential influence on gold
prices, although it's not statistically significant at a traditional significance level (0.05).
Interest rates and the dollar index, based on their coefficients and p-values, do not seem to be
statistically significant predictors of gold prices in this model.
Further investigation or a larger dataset might help in refining the model or exploring other
variables that could better predict gold prices.