Impact of US Oil and Gold Prices on the Stock Market: An Asymmetric Analysis

Abstract

Aim of the Study: The research attempts to reconnoiter the asymmetric effects of oil & gold prices on the US stock market and investigates volatility also in the stock markets of incipient economies employing monthly data (January 2010 to June 2021).

Methodology: The researchers applied a non-Linear Autoregressive Distributed Lag model to figure out the short and long-term effects as well. The empirics show that the cost of gold has a positive effect on the cost of the stock market of large emergent BRICS economies, while the Indonesian stock market, Thailand, Mexico, and Chile have an adverse effect. In addition, oil prices hurt all rising stock markets.

Findings: The oil and gold volatility has a counter effect in both the short & long term in all emergent economies’ stock markets.

Conclusion: The outcome shows that the emerging economies stock markets are more compromised by awful news reports and occasions that bring about questionable monetary conditions.