Shifting sands: how major events shape gold futures in the Indian commodity market

This research examines how significant world events affect the gold future commodity market, giving investors a grasp of the fundamental dynamics influencing precious metal investments in precarious market conditions. This paper evaluates the risk and return of gold futures in India from 2020 to 2024, focusing on significant events - COVID-19 pandemic, US Presidential election, Russia-Ukraine war, G20 summit, Israel-Hamas conflict, Ram Mandir inauguration, and the 2024 Assembly elections. Risk is measured using Garman- Klass Volatility, while returns are analysed using event study method using 1210 daily data points from the multi commodity exchange (MCX India). The market experienced a significant positive abnormal return in the adjustment window of the first wave of COVID-19, followed by the Russia-Ukraine and Israel Hamas wars and sensitive to geopolitical events providing policymakers and investors with insightful insights to improve their portfolio management during economic and political unpredictability. This study examines the impact of seven major global events on gold futures including the latest occurrences of 2024. Unlike previous research, which has often focused on historical events, this study integrates a comprehensive analysis of adverse and positive global disruptions, offering a fresh perspective on gold’s role as a haven asset and its price volatility.