CASE IN VIETNAM: WHAT FACTORS HAVE A STRONG EFFECT ON GOLD PRICE IN 5 YEARS PERIOD

Abstract

This study aims to evaluate the key influence factors of gold price in Vietnam from 2011 till June 2015. Based on analyses of the determinants, this paper renders quantitative results for the influence to assist investors reduce the risk and gain return when investing in the Vietnamese gold market. Variables which are “consumer price index in Vietnam”, “inflation rate in Vietnam”, “USD/VND exchange rate” and “nominal interest rate in Vietnam” are employed to construct a model of the gold price in Vietnam. The model learns from monthly observations pertained to the last day of the month spanning the period from January 2011 to June 2015. The results show that there is a positive relationship between the Vietnam gold price and the USD/VND exchange rate. We conclude that the inflation and the nominal interest rate in Vietnam have no statistical significance upon the gold price. Moreover, when realizing the movements of USD/VND exchange rate and the CPI, the investors could forecast the gold price in Vietnamese market. Finally, the research results advise the Vietnamese government key factors for managing the domestic gold price more effectively.