Psychological Barriers in Gold Prices?

Abstract

This paper examines for the first time the existence of psychological barriers in a variety of daily and intra-day gold price series. This paper uses a number of statistical procedures and presents evidence of psychological barriers in gold prices. We document that prices in round numbers act as barriers with important effects on the conditional mean and variance of the gold price series around psychological barriers.

Keywords: gold, psychological barrier, behavioural finance

JEL Classification: G14, G15