Causal Relationship between Gold Price and Sensex: A Studt in india Context.

Gold has been used around the world as an instrument for investment to hedge against inflation or in the form of jewellery. All these factors are the reason for hyping the demand for gold day by day. As per world gold council gold demand in India is about to rise 33% by 2020.The cumulative annual demand will be excess of 1,200 tonnes by 2020.Recently India has become the largest consumer of gold and price of gold is likely to breach Rs 32,000 mark in the next calendar year. There is an inverse relationship between gold price and dollar. In this paper, an attempt has been made to investigate the existence of unidirectional or bidirectional relationship between gold price and Sensex for the period of 10 years (2002-2012). The results of the analysis show that there is no causality between the gold price and Sensex. Read More