Gold price and inflation in Vietnam
Abstract
This study had tried to compose the obvious movements of gold price in both longrun and short-run periods. The experimental model suggested the conditions that would be
satisfied with the increase in gold price over time at the general inflation rate and hence
gold would be an long-run effective hedging asset against the inflation. Also, the model
determined that the short-run fluctuations of explanatory factors such as the world gold
price, the USD/VND exchange rate, the betas of gold, the interest rate and the impacts of
Government’s policies on Vietnam gold price can extremely interrupt the equilibrium
relation and create the significant volatility of gold price in the short term. Using monthly
data from January 2007 to December 2014 and applying the cointegration regression and
VECM approaches, the practical investigation confirms the fundamental hypotheses of the
research model.