The Asymmetric Effects of Oil Price on Food Price and Gold Price?

Abstract

Economically, the relationships among gold prices, oil prices, and food prices have been a critical factor for every country. This study aims to investigate the asymmetric relationship between gold prices, food prices, and oil prices. As a contribution to the literature, the study also considers the post-COVID-19 pandemic period, which is a crucial event. The study examines whether the changes in global gold and food prices were caused by changes in oil prices, using the asymmetric causality test developed by Hatemi-j, for the period covering 2005:1-2023:10. During the COVID-19 period from 2020:1 to 2023:10, the relationship between variables is discussed separately. The analysis findings for the main period reveal a significant causal relationship between global food prices and oil prices. Furthermore, it has been established that a negative shock in global food prices negatively impacts oil prices, while a positive shock in global food prices positively impacts oil prices. In the mirror period, it is evident that the positive shock in oil prices had a negative effect on gold prices. In the post-COVID-19 period, it has been concluded that the negative shock in oil prices had a positive effect on gold prices. The study has also established a significant causal relationship between global food prices and oil prices. The results obtained according to the new economic conditions that emerged after the COVID-19 pandemic is expected to provide more accurate information to future studies and policy makers.