The analysis of factors affecting price of selected commodities

Abstract

Research background: Commodities are attractive investment opportunities and are objects of many researches. Traditional and most stable seem to be precious metals gold and silver. In the global world where anyone can access information in seconds it is crucial to know the background of price development in order to make the right investment decision. Purpose of the article: This paper focuses on international commodity exchanges and analyzes factors affecting prices of selected commodities. It offers a summary of recent studies and continues with an analysis of most relevant factors affecting price of gold and silver. Methods: After collecting data and testing their consistency we construct two hypothesis models. Using linear regression model we test the appropriateness of models which are constructed for each commodity. Subsequently, we test statistical significance of individual explanatory variables, such as dollar exchange rate, VIX, CPI, DJIA, DAX or oil price. Additionally, we take into consideration not traditional factors e.g. Bitcoin. Findings & Value added: Finally an evaluation of results are carried out and the influence of variables are quantified. For instance, negative impact of VIX and dollar exchange rate in observed period of time was confirmed. Given the fact that there can be various other factors influencing price development of gold and silver this paper serves as basis for further analysis in this direction.

Keywords

• gold;
• silver;
• commodity;
• regression analysis;
• econometric model