INTERACTION BETWEEN FINANCIAL MARKET INDEXES AND GOLD MARKET: AN APPLICATION TO DEVELOPING COUNTRIES

Developing countries are the ones with high economical potential and provide high income opportunities to the investors. Beside the fact that these countries have a high growth rates they also include high risks. In order to prevent risks some protection measures could be taken. In this perspective, gold is commonly accepted as a safe haven. Aim of this study is to show whether gold is safe for investors in the risky markets. For this purpose interactions between developing market indexes and the gold market have been analyzed. In the study, Turkey, China, Brazil, Russia and India are selected and market index data of these are examined. In addition international gold price series are included into the data set for an indicator of gold market. This study covers the period of 01.01.2010-01.10.2018 and DCC methodology which deals with time dependent correlations is implemented. According to the results the correlations between gold market and other markets are time varying and volatile