The relationship between the exchange rate and the price of gold in Syria during the period (2011-2022)

Abstract

The research aims to study the nature of the impact that the fluctuation of the exchange rate of the Syrian pound against the US dollar (US/SP) could have on gold prices locally, during the period from the beginning of 2011 until the end of September 2022 on a daily basis, at a rate of five days per week, as gold is considered an asset for hedging, through it, investors seek to preserve the value of their money from inflation factors and against fluctuations in exchange rates. Gold is considered a safe haven that does not lose its value due to financial and economic turmoil, and to preserve the wealth and savings of investors despite the fluctuations and speculation to which it is exposed. Gold is actually a hedge against the devaluation of paper currency. local, by conducting a statistical study of the data and then finding an appropriate regression model to test the hypotheses of the study, the results showed the existence of a correlation between the local gold price and the exchange rate against the US dollar, that there is a direct and strong correlation between them, and it is a two-way causal relationship, The results of applying the ECM model test showed that the relationship is inverse in the short term to turn into positive in the long term, and as an explanation for this, speculators in the market in the short term take advantage of the fluctuation of exchange rates to achieve a higher profit margin, and continuously, while the price of gold in the short term is stable, as it is a sterile metal that does not It generates any return only that investors take in the long term to hedge against the depreciation of the fiat currency.