Research Of International Gold Price Forecasting Based On GM-markov Model

Since the Bretton Woods System collapsed, governments haveloosened control of the world gold price, which made gold price intomarketization gradually. Nonetheless, gold not only has goods attribute,but also has monetary attribute and financial attribute, which makes thefactors influencing gold price more complex, and the gold price tofluctuate more violently. At the same time, with the change of time andthe conditions, the way and degree that factors act on gold price willchange and the factors will interact on each other, which makes thequantitative analysis of the factors more complex. This leads to that theway of trying to forecast gold price by analyzing the change rules of thefactors is difficult to work. Therefore, this paper will break through thelimitations, and build GM-Markov model to forecast gold price by usingthe historical data.First, this paper analyzes the factors that influence gold price, that ishow supply-demand relationship, macro-economic factors and otherfactors function on gold price. Then, considering the complex situation ofgold price influenced by many uncertain factors, such as demand-supplyrelationship, macro-economic factors, etc, it uses the improved model ofGM-Markov to forecast the gold price on the basis of previous studiesand the theoretical knowledge of statistics, maths and economics. In theend, it summarizes the paper based on the analysis above, and points out the deficiencies of the paper.The result indicates that the improved model of GM-Markov, whichis combination of the metabolic Grey forecasting model and the weightedMarkov model, not only can reflect the overall trend of gold price, butalso catch its stochastic volatility. In addition, its accuracy of simulationis higher than the common model of GM-Markov. The gold pricesforecasted by the improved model between March2014to May2014respectively are1272.3dollars per ounce,1301.0dollars per ounce and1313.6dollars per ounce.