The Relationship Between Economic Confidence Index and Financial Assets: An Analysis of Gold, Dollar and Stocks
Chapter from the book: Kılıç, E. (ed.) 2025. Finance Research in the Perspective of Current Topics and Techniques.

Mesut Aslan
Bingöl University

Synopsis

The Economic Confidence Index is an indicator that measures the confidence of consumers and businesses and is considered a reflection of economic stability. This index influences consumer spending and investment decisions by reflecting people's expectations about the future economic situation. Gold is generally seen as a safe haven during periods of economic uncertainty, and as demand increases, its prices rise. The US Dollar, as the primary currency in global trade, can be affected by fluctuations in the global economy. Stocks, on the other hand, can gain or lose value depending on company profitability and tend to move in parallel with general economic trends. This study examines the relationship between the Economic Confidence Index and these three financial investment assets. The analysis revealed a causality relationship between gold and the Economic Confidence Index at the 1% significance level, as well as the influence of the Economic Confidence Index on gold at the same 1% level. Similarly, a 1% causality relationship was found between the US Dollar and the Economic Confidence Index, while the Economic Confidence Index was found to have a 5% causality relationship with the US Dollar. Furthermore, a 10% causality relationship was identified between stocks and the Economic Confidence Index, with the Economic Confidence Index also having a 10% effect on stocks. The findings suggest that the Economic Confidence Index could be an important leading indicator reflecting investors’ expectations for the future and market movements. Based on these results, it is recommended that investors use the Economic Confidence Index as a leading indicator to shape their portfolio strategies.

How to cite this book

Aslan, M. (2025). The Relationship Between Economic Confidence Index and Financial Assets: An Analysis of Gold, Dollar and Stocks. In: Kılıç, E. (ed.), Finance Research in the Perspective of Current Topics and Techniques. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub685.c2886

License

Published

March 24, 2025

DOI