Interactions between gold and stock market returns:evidence from Amman stock exchange

The interaction among financial and precious metals in various markets is a furthermost interesting matter for investors. The fluctuation in prices in one market may be influence the price index of the other market. Gold prices have widespread economic effects on different financial activities. The effect is directly specious in all financial decisions adopted by investors. In this study, we check if bank stock return (SRB) and insurance stock return (SRI) have significant effect on gold price (GOP). We employ the ARDL co-integration to test the long?run association between SRB, SRI, and GOP. The study reveals that the SRB and SRI have no long-run effect on gold price. There is only one unidirectional causality from SRB to GOP. Finally, a one percent increase in stock return in banks would lead to decrease 984% in gold price.