The Relationship between Gold Prices and Equity Market Performance: Evidence from the Zimbabwe Stock Exchange
We sought to investigate the association between gold prices and equities on the Zimbabwe Stock Exchange
(ZSE). Correlation analysis, regression analysis, and granger causality tests were conducted to determine the nature and
direction of the relationship. We found a weak short-run unidirectional relationship between gold prices and stocks of gold
mining firms on the ZSE. However, we observed no association between gold prices and shares of nongold mining firms on
the bourse. We concluded that gold can be best used for diversification purposes when held as a commodity than when
investors buy shares of gold mining companies.
Keywords - Gold Prices, Stock Prices, Relationship, Diversification.