Factors affecting gold price in Malaysia

Gold prices have become volatile in recent developments. Nevertheless, owing to its hedging properties, gold continues to be a popular choice among investors. There are many studies regarding the behaviour of gold prices that had been conducted by researchers all around the world, but the results show an inconclusive finding. This study tries to determine the factors that influence gold prices in Malaysia, specifically the macroeconomic variables namely oil price, inflation rate and interest rate. Adopting the Multiple Linear Regression Model on monthly data from 2017 until 2019 collected from DataStream and BNM, the empirical result shows that oil price and inflation is significantly related to the gold price in a negative and positive manner respectively. Meanwhile, interest rate is insignificant and has no relationship with gold prices. Several recommendations are highlighted amongst others to add other variables such as gross domestic product, money supply, and house price index and to increase the time period of the study.