Abstract:
This paper studies some factors that are considered by many to be influencing the
gold prices in the Pakistan’s markets. It specifically studies and tends to observe the
relationship of certain factors, highlighted by the past literature, and the prices of
gold. This study pertains to the specific environment of Pakistan and tends to
determine whether the relationship of factors - US Dollar/ Pak Rupee exchange rate,
inflation rates, and interest rates (KIBOR) – exists or not and what is the elasticity of
gold prices in relation to each of them. The present paper focuses on the time frame of
the depression i.e. 2006 to 2012 (7years of which 2 years are pre-depression and rest
are post depression). This paper studies the relationship through the usage of some
regression statistical tools and uses their inter-relations to conclude and set an
opinion. There are obviously certain limitations to study but this paper keeps in focus
the major factors so that the deviation from the actual results is as low as possible.
This paper concludes on what factor, of the listed above, is most dominant and most
effective in determining which way the gold prices should move in future. This paper
is equally helpful to the students studying dynamics of markets and businessmen that
are related to the industry in any form.
