What are the factors which effect the fluctuation of gold prices in Sri Lanka?


 


 


Introduction


            Fluctuation is simply defined as the variation in level, degree or value hence to change often from high to low levels in an unpredictable way. Fluctuation is a commonplace in pricing literature. The prices of gold, for instance, fluctuate depending on various circumstances that revolve around the acquisition and selling of the product. Notably, gold is one of the few investment options that are represented by the actual product. Gold is very much tangible wherein you are buying something that is physically present and something that all currency gains its value from.


The price of gold therefore usually reflects surge in prices especially when the market plummet or become unstable. Since the market is directly related to paper currency prices, it can also affect the fluctuations in gold prices. Nevertheless, the fluctuation of gold prices can be also influenced by how expensive it is to explore for and develop gold to produce the product needed for selling gold or make it into sellable gold jewelry.


These and other factors are not yet explored in the context of Sri Lanka. In 2007, gold prices are expected to go over the roof in the local market with the impact felt because of the seasonal demand and devaluation of Sri Lankan rupee. In this study, various factors that are affecting fluctuation of gold prices in Sri Lanka will be explored.


 


Research Question


            The problem that will be addressed in this study is the various factors which may affect the fluctuation of Sri Lankan gold prices. The key question that will be given answer to is: What are the different factors which may affect the fluctuation of gold prices? In lieu with this, the following specific research questions:


1)    In what specific ways do these factors affect the fluctuation of gold prices?


2)    How will fluctuation of gold prices in Sri Lanka affects the gold trading industry?


3)    Do these factors provide advantages or disadvantages for Sri Lankan gold traders?


 


Objectives


            The main aim of this study is to investigate different factors leading to the fluctuation of gold prices in Sri Lanka. Specifically, this research purports to:


·         Determine the various factors that affect the conduct of gold trading in Sri Lanka


·         Understand how these factors could eventually lead to fluctuation in gold prices


·         Study the opportunities and challenges that these factors are imposing on Sri Lankan gold trading industry


·         Explore the flexibility of gold pricing in Sri Lankan context 


Methodology


The research strategy that the study will utilize is the descriptive method. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study (Creswell, 1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing. (Best, 1970) In addition, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994).


In this study, primary and secondary research will be both incorporated. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue and the different variables that involve with it. The primary data for the study will be represented by the survey results that will be acquired from the respondents.


On the other hand, the literature reviews to be presented in the second chapter of the study will represent the secondary data of the study. Books and journals, theses and related studies, newspaper and magazine will be the secondary sources. For this research, the researcher, after gathering the relevant data needed, will collate them together with published studies from different local and foreign universities and articles from social science journals, then afterwards render a critical analysis on the collected documents and verbal materials.


The data results of the study will be analyzed by determining their corresponding frequency, percentage and weighted mean. The following statistical formulas will be used:


1.     Percentage – to determine the magnitude of the responses to the questionnaire.


            n


% = ——– x 100        ;           n – number of responses


            N                                 N – total number of respondents


 


2.     Weighted Mean


            f1x1 + f2x2  + f3x3 + f4x4  + f5x5


x= ———————————————  ;


                        xt


where:            f – weight given to each response


                        x – number of responses


                        xt – total number of responses


 


Reference 


Best, J. W. (1970). Research in Education, 2nd Ed. Englewood Cliffs, N.J.: Prentice Hall, Inc.


 


Creswell, J.W. 1994. Research design: Qualitative and quantitative approaches. Thousand Oaks, California: Sage.


 



Credit:ivythesis.typepad.com


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