Scholarship from the academy

Finance

AN EMPIRICAL STUDY ON THE IMPACT OF MACROECONOMIC ANNOUNCEMENTS ON GOLD PRICES (XAU/USD) IN THE FOREX MARKET AND HOW IT AFFECTS TO THE INVESTORS

AK ADITYA KOLI ·
Mulund College of Commerce

This paper investigates the impact of macroeconomic announcements on gold prices (XAU/USD) in the forex market and the corresponding behavioral responses of retail investors, with particular focus on the Indian market. Using a mixed-methods approach combining a primary survey of 100 respondents with secondary data analysis, the study finds that interest rate decisions by the U.S. Federal Reserve and inflation data (CPI) are the most influential drivers of gold price volatility. Correlation analysis yielded r = 0.76, confirming a strong positive relationship between macroeconomic news and gold price movements. Both hypotheses of the study are accepted: macroeconomic announcements significantly affect gold price volatility, and investor awareness of such announcements significantly influences trading behavior. The study also reveals that 40% of retail traders rely primarily on social media for financial information, underscoring the need for structured financial literacy programs. The findings contribute to bridging macroeconomic theory with behavioral finance in the context of Indian forex gold trading.