From research: How does the price of oil affect the development of stock and gold prices?

Our researchers continue their investigation into the topic of oil prices. Oil prices have both direct and indirect influences on various sectors of the economy. In their study published in Energy Economics, FISZEDER, FALDZINSKI, and MOLNÁR (2023) explore the impact of investor attention to oil prices on the performance of oil, gold, and the stock market. This attention is measured by the frequency of Google searches for “oil prices”.

Employing this measure and introducing a novel model, the “DCC-X-RGARCH-X,” they discovered that heightened investor focus on oil prices can align the movements of stock market and gold returns with those of oil returns.

This model improves the predictive capabilities of conventional models in this field, particularly in forecasting the volatility of oil returns. Additional details about the model and the application of Google Trends metrics are available at: https://www.sciencedirect.com/science/article/pii/S014098832300141X.