Investors with the Golden-i: Preference in Gold-i Investment
Gold price has risen recently after the United States implemented a drastic monetary action by reducing interest rate to almost zero to cushion the effect of Covid-19 pandemic on the economy. However, what has actually triggered the gold price could be beyond Covid-19. Therefore, this study examines the factors influencing customers’ preference in gold investment (Gold-i). Two variables; inflation and income growth are significant while interest rate is not significant in relation to Gold-i preference. Since interest rate relates to the strength of US Dollar, central bank reserves and investment demand, it could be postulated that during the study in 2019, interest rate and gold price had risen in tandem. This research further enriches knowledge and contributes to advancement of research in gold investment, hence enabling researchers, bankers, investors, trade policy makers to further understand the investment in gold-i during economic crises, in particular the current recession triggered by the Covid-19 pandemic.
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