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The relationship between gold price and the American financial market

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  • Wajdi Moussa
  • Nidhal Mgadmi
  • Rym Regaieg
  • Azza Bejaoui

Abstract

In this paper, we examine the effect of the gold price on the American financial market. In particular, we analyse the impact of gold price on dollar exchange rate and returns of the American banks. Methodologically, we use a unified approach based on multi‐models not only to examine the gold price and U.S. market nexus but also to highlight the dynamics of such relationship over the period December 19, 1994–June 30, 2017. We show that a long‐relationship between gold price, dollar exchange rate and U.S. bank returns is well documented. As well, the behaviour and dynamics of such relationship are characterized by some salient features. In particular, the nonlinear adjustment of gold price against the U.S. financial market is well documented, implying that gold price plays a substantial role in creating a pressure on the dollar exchange rate and U.S. banks returns. Such findings could provide interesting insights for policymakers and investors.

Suggested Citation

  • Wajdi Moussa & Nidhal Mgadmi & Rym Regaieg & Azza Bejaoui, 2021. "The relationship between gold price and the American financial market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6149-6155, October.
    • Handle: RePEc:wly:ijfiec:v:26:y:2021:i:4:p:6149-6155
    DOI: 10.1002/ijfe.2113
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    References listed on IDEAS

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