The determinants of gold price in Malaysia

The significant volatility in gold prices (GP) has become a major concern for market participants, including producers, consumers, and investors, given gold’s increasingly important role in Malaysia’s economic development. This study aims to identify and analyze the key macroeconomic and commodity-specific factors that determine gold price movements in the Malaysian market. Using a Multiple Linear Regression (MLR) model with monthly time-series data spanning from January 2000 to December 2010 (132 observations), the research focuses on Gold Price (GP) as the dependent variable. The analysis includes four independent variables: inflation rates (INFR), interest rates (INTR), the Ringgit-Dollar exchange rate (EX), and domestic gold production (PRDG). The findings are expected to reveal a strong and significant relationship between these factors and gold price determination, with hypothesized positive and negative influences. By quantifying the magnitude and direction of these relationships, this research will provide valuable insights for policymakers, market regulators, and investors seeking to better forecast gold price fluctuations and mitigate financial risk within the Malaysian commodity and financial markets.