Gold Demand Across Countries

34 Pages Posted: 2 Feb 2021

See all articles by Dirk G. Baur

Dirk G. Baur

University of Western Australia - Business School; Financial Research Network (FIRN)

Balagopal Gopalakrishnan

Indian Institute of Management Kozhikode

Sanket Mohapatra

Indian Institute of Management Ahmedabad

Date Written: November 21, 2020


This paper analyzes the demand for jewelry, bars & coins, and gold ETFs across high-income and middle-income countries. We employ a simultaneous equations model that allows a joint determination of the various categories of gold demand and find significant differences across gold demand categories and across countries. Jewelry and bars & coins demand are positively related in middle-income countries but unrelated in high-income countries. Jewelry demand is negatively related to gold prices in middle-income countries but not in high-income countries. Bars and coins demand positively reacts to global risk (VIX) in high-income countries but not in middle-income countries. The findings indicate that not all gold is equal and serves different purposes in different countries. Gold is generally more integrated with financial markets in high-income countries than in middle-income countries and jewelry is the least integrated among the three categories of gold demand.

Keywords: Gold Demand, Jewelry, Bars and Coins, Gold ETFs, Financialization

JEL Classification: E2, G1, Q31

Suggested Citation

Baur, Dirk G. and Gopalakrishnan, Balagopal and Mohapatra, Sanket, Gold Demand Across Countries (November 21, 2020). Available at SSRN: or

Dirk G. Baur

University of Western Australia - Business School ( email )

School of Business
35 Stirling Highway
Crawley, Western Australia 6009

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane


Balagopal Gopalakrishnan

Indian Institute of Management Kozhikode ( email )

Faculty Block 2/14

Sanket Mohapatra (Contact Author)

Indian Institute of Management Ahmedabad ( email )

Wing 1-F, IIM Old Campus
Ahmedabad, 380015

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