A Gold Price Anomaly

Authors

Laurence E. Blose, Grand Valley State UniversityFollow
Vijay Gondhalekar

Department

Finance Department

College

Seidman College of Business

Date Range

2013-2014

Disciplines

Business

Abstract

This study examines returns on the COMEX front gold contract over the period 1985 through 2012. The results show that average overnight gold returns are significantly greater than average day returns. The cause of the anomaly is not known, but it is consistent with a high opening price that adjusts during the day. The result suggests that investors should not enter market buy orders when the market is closed to be executed at the price of the first trade. Enter the buy orders later in the morning after prices have adjusted. Similarly, investors selling gold are likely to get a higher price if the order is executed at the opening price.

Conference Name

SO

Conference Location

Destin Beach, FL

ScholarWorks Citation

Blose, Laurence E. and Gondhalekar, Vijay, "A Gold Price Anomaly" (2014). Faculty Scholarly Dissemination Grants. 975.
https://scholarworks.gvsu.edu/fsdg/975