Mind The Gap: Psychological Barriers in Gold and Silver Prices

Lucey, M.E.; O'Connor, F.A.

Abstract

This study tests whether psychological barriers exist around key reference points in gold and silver prices, namely numbers ending in 0 (e.g. $450) and 00 (e.g. $200). Initial observations and tests show gold prices fix less frequently on values ending in 0 and 00, suggesting barriers at these levels which manifest as gaps in the frequency distributions. Statistical tests find support for barriers at numbers ending in 0 and 00 for gold. While initial observations and tests suggest silver prices are not uniformly distributed, there is no statistically significant evidence to support that barriers exist at either 0 or 00.

Citation

Lucey, M., & O'Connor, F. (2016). Mind The Gap: Psychological Barriers in Gold and Silver Prices. Finance Research Letters, 17, 135-140. https://doi.org/10.1016/j.frl.2016.03.009

• Journal Article Type: Article
• Acceptance Date: Mar 5, 2016
• Online Publication Date: Mar 21, 2016
• Publication Date: May 1, 2016
• Deposit Date: Mar 22, 2016
• Publicly Available Date: Mar 21, 2017
• Journal: Finance Research Letters
• Print ISSN: 1544-6123
• Electronic ISSN: 1544-6131
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 17
• Pages: 135-140
• DOI: https://doi.org/10.1016/j.frl.2016.03.009
• Public URL: https://durham-repository.worktribe.com/output/1388558