USING THE ECONOMETRIC MODEL IN THE ANALYSIS GEOPOLITICAL ISSUES OF GOLD

Abstract

Gold is a much sought after resource in the modern world economy. Until the previous decade, the 10 countries were thought to hold the maximum reserves of gold. Our study extends the Geopolitical Issues of Gold on commodity prices of gold (in USD and EUR) by investigating the spillover between them. First, we study appropriately the statistical analysis of the world mine reserves of gold during the period 2011-2016, by region. This paper contributes to the existing literature by presenting an advantageous and a new frequency approach based on the econometric and political analysis. Using monthly data for gold prices from July 1979 to December 2016, we find that gold (in USD and EUR) has a high degree of interaction during the study period. This paper analyzes the causal direction of the correlation between gold prices in USD and EUR and examines the theoretical and empirical relationships between them.