ANALYSIS THE INFLUENCES OF NATIONAL INFLATION, FOREIGN EXCHANGE RATE AND INTEREST RATE TOWARDS DOMESTIC GOLD PRICE IN VIETNAM FROM 2009 TO JUNE 2013

Abstract

Time passed by, notwithstanding, Vietnam monetary system has been growing and the policy makers has attempted to remove gold out of a means of currency, gold still possess its important roles in the Vietnamese life style. The habit to use gold as essential as an effective means of payment of high value assets such as lands, houses, cars could not been eased from Vietnamese people. Instead of VN Dong, Vietnamese buyers mostly release their disbursement in Luong – a unit to measure gold in Vietnam. Year on year, gold attached the value of its own to most of Vietnamese precious properties. Hence, the SBV (State Bank of Vietnam), speculators, savers and people in Vietnam do concentrate on the gold fluctuation. Not written in any paper and document, however, “gold dominated economy” seems to emerge in Vietnam. In fact, when macroeconomic is unstable, new policies release and inflation signals exist; Vietnamese people rush to queue crazily to buy gold in. Through 4.5 years after global crisis event (from 2009 to Mid-2013), the researcher decide to make the research of gold price movement in Vietnam under 3 variables: inflation rate, foreign exchange rate and interest rate. This research found out that Vietnam’s domestic gold price is affected by inflation rate, foreign exchange rate and interest rate simultaneously, based on the result of F-Test. Additionally, Foreign Exchange Rate is a significant factor for the reason of the increasing gold price in years. This result comes from the consequence of t-Test. According to the findings, the researcher recommend the State Bank in Vietnam has to focus on the fluctuation of U.S Dollar in particular and U.S economy, world situation in general to forecast the movement of global gold price which may affect directly to the domestic gold price and psychology of gold consumers in Vietnam.