Asian Journal of Management and Commerce
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P-ISSN: 2708-4515, E-ISSN: 2708-4523

Asian Journal of Management and Commerce


2020, Vol. 1, Issue 1, Part A
A study on commodity markets with reference to crude oil and gold


Author(s): Karishma Gajendra and J. Gajendra Naidu

Abstract: Commodity markets had a dominant presence in global markets ever since the first commodity exchange “Chicago Board of Trade (CBOT)” was established in Chicago in the year 1848, which is one of the largest commodity exchanges in the world. In the second half of the 1980s several developing countries established their own commodity future exchanges. Some of the world’s largest exchanges were established in Brazil and China. Some newly liberalized economies, such as Russia and Hungary, have also setup commodity future exchanges. Commodity exchanges occupy an important place in the world, and it has been estimated that the volume traded on these exchanges are a multiple times those on stock exchanges. Hundreds of commodities trade daily on dozens of exchanges around the world. The amount of commodity trading that occurs in spot, futures, and options markets on these exchanges on a monthly basis is massive, measured in trillions of dollars globally. The size of particular markets, however, varies for different commodities, and some commodity markets see more trading than others do Crude oil is one of the most necessitated worldwide required commodity. Any slightest fluctuation in crude oil prices can have both direct and indirect influence on the economy of the countries. The volatility of crude oil prices drove many companies away. Therefore, prices have been regularly and closely monitored by economists. Crude oil prices act like any other product cost with more variation taken place during shortage and excess supply. In the short term, price of crude oil is influenced by many factors like socio and political events, status of financial markets, whereas from medium to long run it is influenced by the fundamentals of demand and supply which thus results into self-price correction mechanism. This sustained movement in the northern side underlines some of the fundamental changes in the marketplace. The objective is to analyse the return on price and volume of crude oil and gold. An attempt is made to study the Causal relationship between the two and examine the direction of the Causal relationship between them, the following tools have been employed for the analysis of the data. Moving Average, Augmented Dickey-Fuller test, Multiple Regression–Phillips–Schmidt–Shin (KPSS) tests, ARMA Model is used.

Pages: 08-11 | Views: 150 | Downloads: 106

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How to cite this article:
Karishma Gajendra, J. Gajendra Naidu. A study on commodity markets with reference to crude oil and gold. Asian J Manage Commerce 2020;1(1):08-11.
Asian Journal of Management and Commerce