The Impact of Gold Prices on the Vietnamese Stock Market in the Context of Global Trade Policy Uncertainty

Abstract

Purpose: This study aims to assess the impact of gold prices on Vietnam's stock market (VN-Index) in the context of global trade policy uncertainty.
Design/methodology/approach: The research employs a Vector Error Correction Model (VECM) using time-series data with 215 monthly observations from 2007 to 2024.
Findings: The results reveal that gold prices (GOD) exert a negative effect on the VN-Index (VNI) in both the short and long term. Notably, the interaction term between gold prices and trade policy uncertainty (TPU) also has a consistent negative effect on VNI across time horizons. This finding suggests that as TPU increases, the inverse relationship between GOD and VNI becomes more pronounced, indicating the role of gold as a safe haven substitute for equities in times of market instability.
Originality/value: This study contributes new empirical evidence on the gold–stock market nexus under trade policy uncertainty in the context of an emerging economy like Vietnam. The findings are expected to support investors' decision-making and assist policymakers in stabilizing and developing Vietnam’s stock market.