Googling Gold in Indonesia

Abstract

. In this modern world, collecting information becomes easier and quicker. Google Search dominates the market worldwide as an important source of information. Despite the growing researches that try to utilize it as a tool to observe the behavior of population, researches in the commodity market are still rare. This research applies an autoregressive model and Granger causality to explores the relationship between investor attention (captured by Google Trend) and gold. Indonesia has the largest gold mine in the world and there is a growing trend from people to invest in gold especially through digital platforms. The number of people uses Google Search in Indonesia will support the exploration of investor attention. The result shows that when there is a positive return in gold, it will decrease search queries, vice versa. People treat gain and loss differently. In addition, google trend can be used as an instrument to forecast gold return.