Correlation Between Oil and Gold Silver Using Regression Analysis

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  • Topic: Peak oil, Benchmark, Precious metal
  • Pages : 5 (1226 words )
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  • Published : August 22, 2011
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Multi Commodity Exchange of India (MCX) is a demutualised commodity exchange with permanent recognition from the Government of India to facilitate online trading, clearing and settlement operations for commodity futures markets across the country. Since its inception millions of small and medium enterprises, corporate houses, exporters, importers and traders have benefitted from this nationwide electronic trading platform through its efficient and transparent price discovery and price risk management. MCX ranks No. 1 in silver, No. 2 in gold, and No. 3 in crude oil.

This document contains the correlation between change in prices of Gold, Silver and OIL with respect to each other. Over the last 50 years or so, gold and oil have generally moved together in terms of price, with a positive price correlation. The price of oil is poised to rise steadily as the supply/demand imbalance increases and the dollar declines, even if there are no supply disruptions, terrorist threats or geopolitical concerns to consider. As this happens, the price of precious metals will climb until they eventually catch up to their historic ratios.

The oil prices definitely determine the costs of a country’s economy. However, the degree of the effects may vary among different industries. High oil prices may dampen a country’s economy activities and stock market as a whole. The same theory applies to gold, silver prices too. Nevertheless, there should be some industries which benefit from high oil and gold, silver prices. Commodities

Commodities for which analysis have been done using statistical methods as follows: Gold

Main Data:

Month-YearCrude Oil (Rs. In Lakhs)/LotsSilver(Rs in Lakhs)/LotsGold (Rs in Lakhs)/Lots Feb-2005 57630.65 1311280.45554577.04 Mar-2005 132362.24 1492926 692900.02 Apr-2005 275824.58 1391875.57513792.54 May-2005 403515.63 1361542.78696960.07 Jun-2005 1025834.1 1530791.54848613.35 Jul-2005 1955893.08 1083342.58994230.52 Aug-2005 2740941.84 1270751.68953765.39 Sep-2005 2688590.89 1807579.752414181.78 Oct-2005 2010215.72 2422228.53 2199385.07 Nov-2005 1450380.75 2368303.42608423.58 Dec-2005 1029696.14 3223181.114894473.86 Jan-2006 948291.3 3494238.836556802.61 Feb-2006 1194250.92 1938536.585758718.57 Mar-2006 1330380.32 3896481.397748336.67 Apr-2006 738551.33 7207205.987475297.91 May-2006 651179.87 6071277.8910150417.59 Jun-2006 424607.95 4258583.657717549.93 Jul-2006 614862.02 3598952.0810028712.99 Aug-2006 836074.24 4779742.738074195.27 Sep-2006 1275558 .91 4868747.288681169.95 Oct-2006 1679149.03 4294365.097805387.14 Nov-2006 1699163.27 4379644.267008183.53 Dec-2006 1640493.16 4676568.524840012.05 Jan-2007 2529211.67 5585620.845645149.58 Feb-2007 2730830.15 5529072.426308839.1 Mar-2007 3325369.62 5944265.017022558.62 Apr-2007 2538789.714388504.494408963.36 May-2007 2444850.233873709.885381761.44...
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