International Conference on Economics, Finance & Business, Venice

EXAMINING THE CORRELATION BETWEEN GOLD PRICE FLUCTUATIONS AND UNEMPLOYMENT LEVELS IN THE CONTEXT OF GREEN TRANSITION: INSIGHTS FROM TIME SERIES ANALYSIS AND GRANGER CAUSALITY

STEFAN RAYCHEV, GERGANA TANEVA-ANGELOVA

Abstract:

This article tackles the complex task of establishing a correlation between the volatility in gold prices and levels of unemployment, while considering the emerging influences of green economics and the green transition. We employ regression analysis, cluster analysis, time series, and Granger causality to investigate the relationship between gold prices—a traditional safe-haven asset and alternative income source—and unemployment rates, particularly during periods of economic uncertainty. As economies shift toward sustainable development, green investments are altering traditional economic dynamics, potentially affecting the role of gold as a security asset. This empirical study tracks these interactions from 2019 to 2024, using data from the EU27. This period encompasses significant economic and geopolitical challenges—including the COVID-19 crisis, military actions in Ukraine, and inflationary pressures—as well as a stronger emphasis on green transition policies. Central banks have responded by increasing interest rates, enhancing the appeal of investment assets such as bonds and gold. Meanwhile, labor markets have experienced disruptions, with evolving employment patterns due to the green transition and heightened unemployment across European countries.

Keywords: green economics, green transition, sustainability, gold price volatility, unemployment levels, labor market dynamics, economic indicators, time series analysis, Granger causality