Effects of Macroeconomic Variables on Gold Prices in Ghana

Abstract

The purpose of this study is to examine the effect of macroeconomic variables on gold prices in Ghana”. The study used “made use of monthly data” sourced from “Bank of Ghana, Ghana statistical service and” World Bank website. The time series estimation techniques were adopted in order to examine the effect of macroeconomic variables on gold prices The study shows that Exchange rate significantly “affect Gold prices in the long run. Crude oil prices, Inflation and Interest rate did not significantly affect economic growth in the long run. The study” also found that that Crude oil prices and its immediate two lagged values in the short run “significantly and positively affects Gold prices. Exchange rate, the third lagged value of Crude oil prices, Inflation and its three lagged values, and interest rate did not significantly affect Gold prices in the short run. It is thus “recommended that investors take advantage of the” results from the study to “their investment strategies” by considering both the external environment and as well the internal environment of the country. It was further recommended that domestic firms learn from the foreign firms that are experienced through a collaboration in the supply chain where there is the tendency that foreign firms transfers the technological know-how and management to local suppliers they deal with, so as to enhance the technological transfers and skills.