The investigation of the capital market of a nation as far as an extensive variety of large-scale monetary and money-related factors has been the topic of numerous examines since the most recent couple of decades. As of late one such factor, that is, gold value unpredictability has pulled in the consideration of numerous specialists, academicians and examiners. Subsequently, this paper is an endeavor to examine the causality connection that may keep running between residential gold costs and securities exchange returns in India.
The examination by thinking about the residential gold costs and securities exchange returns in light of BSE 100 file, explores the Granger causality in the Vector Error Correction Model for the period January 1991 to December 2009. The examination gives the proof of criticism causality between the factors. It induces that the Gold costs Granger-causes securities exchange returns and securities exchange returns additionally Granger-causes the gold costs in India amid the example time frame. Along these lines, both the factors contain some noteworthy data for the forecast of one as far as another.
The capital market of a nation as far as an extensive variety of large-scale monetary and money-related factors has been the topic of numerous examines since the most recent couple of decades. Observational examinations uncover that once monetary deregulation happens, the securities exchanges of a nation turn out to be more touchy to both local and outside elements. What’s more, one such factor is the cost of gold.
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