...investors find it more profitable to invest their money into gold as the value of gold per gram is high due to its increased demand. When investors invest into gold naturally they don’t have money to invest in other places like stocks thus stock market is affected by gold prices. The attractive gold price takes the attention of the investor and as a result less investment in stock is made and stock market suffers. This paper aims to find this relationship between stock market and gold prices. In this research Karachi stock exchange has been considered as the stock market to see the relationship with gold prices. ADF unit root test and granger causality test have been used in this research. The results showed that data series for both gold and KSE 100 index has integration at first order. The results also showed that there is a relationship between stock market and gold prices and the relationship is bidirectional. Gold prices affect the Karachi stock exchange and Karachi stock exchange also affects gold prices. Keywords: Gold prices, stock market, gold price and stock market, gold and stock market relationship. Table of Contents Sr.# | DESCRIPTION | PAGE NO. | 1 | AcknowledgEment……………………………………... | I | 2 | ABSTRACT………………………………………………….. | II | 3 | CHAPTER 1. INTRODUCTION…………………………. 1.1. Overview………………………………………………. 1.2. Research Objective………………………………. 1.3. Problem Statement……………………………… 1.4. Hypothesis ...………………………………….. | 44555 | 4 | CHAPTER 2. LITERATURE...
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