Empirical Study of Dollar Index´s Dynamic Effects on the Closing Price of China Spot Gold Market

This study\´s objective was to the issue for Impact Mechanism of the dollar index closing price for the closing price of Chinese spot gold market. Cointegration method is integrated. The sample is to use close price of daily of Au9999 in Shanghai Gold Exchange and dollar index from 31th Oct 2002 to 30th Sep 2009. Empirical results: (1) With the depreciation of the dollar the closing price of gold goes up; (2)There is co-integration relation between dollar index and the closing price of Chinese spot gold; (3)The closing price of Dollar index is Granger reason of that of China spot gold but the closing price of China spot gold is not Granger reason of dollar index. Conclusions: (1)the U.S. dollar in the long term dominates the Chinese spot gold closing price\´s trend; (2) "hedge" function of gold is not expressed obviously to U.S. dollor. Advice:(1)there must be a powerful economic force for the Chinese gold market to establish its economy base; (2)It\´s important to speed up the construction of the gold futures market to compensate for function deficiencies in the spot gold market.