An Analytical Study on Gold Prices and its Impact on Stock Market

This dissertation presents an analytical study of gold prices and their impact on the stock market, focusing on the comparison between Sensex30 and SBI Gold ETF during significant events such as volatility in 2013, General Elections in 2014 and 2019, the Covid crash in 2020, and inflation worries in 2022.Daily price data were collected from the Bombay Stock Exchange and reputable financial websites, with analysis conducted using Microsoft Excel.Correlation coefficients were calculated to assess the relationship between gold prices and stock market performance, while returns analysis provided insights into the magnitude and direction of returns before and after each event.The findings suggest nuanced interactions between gold prices and stock market behaviour during different market conditions and events, offering valuable insights for investors and policymakers navigating financial markets. -INTRODUCTION INTRODUCTIONIn the complex and dynamic landscape of financial markets, understanding the interplay between various assets is of paramount importance for investors, policymakers, and financial analysts.Among the myriad of assets, gold has long held a unique position as a store of value, a hedge against inflation, and a safe haven in times of economic uncertainty.Its price movements have often been scrutinized not only by gold enthusiasts but also by those seeking insights into broader market trends.Concurrently, the stock market, as a primary avenue for investment and wealth creation, exerts a profound influence on global economies and individual investors alike.The performance of stock markets reflects not only the underlying fundamentals of companies but also broader economic conditions, investor sentiment, and geopolitical factors.This dissertation aims to delve into the intricate relationship between gold prices and the stock market, seeking to analyse how fluctuations in gold prices impact stock market behaviour.While this relationship has been explored to some extent in the existing literature, there remains a need for a comprehensive analytical study that incorporates diverse methodologies and considers various market conditions.42,000.