Forecasting of Gold Prices using ARIMA Model

Abstract

Accurate Prediction of prices of gold is important so that business prosperity of financial institutions and the common man remain healthy. Investment in gold is a saving in households as it comes as a rescue to overcome a financial crisis. The study has considered gold prices from Jan 2000 to March 2023. Application of ARIMA (Auto Regressive Integrated Moving Average method) has been established. The effectiveness of the model is checked through autocorrelation, partial autocorrelation, stationarity, and heterodecesacity. Hence ARIMA (1, 1,0) has been proven as the finest model for predicting gold prices. Outcomes of ARIMA model forecasting are important guidelines to understand investment in gold prices when momentum is observed in environmental and economic factors.