Forecasting MethodsGold Price Forecasting

ContentIntroductionForecasting ModelsGold Price Data Graphs

IntroductionForecasting is a process of predicting or estimating the future based on past and present data. Forecasting provides information about the potential future events and their consequences for the organisation. It may not reduce the complications and uncertainty of the future. However, it increases the confidence of the management to make important decisions. Forecasting is the basis of premising. Forecasting uses many statistical techniques. Therefore, it is also called as Statistical Analysis.Forecasting vs. Prediction:Forecasting: Estimating future by casting forward from past data.Prediction: Estimating future based on any subjective consideration other than just past data.

Forecasting Models

Forecasting Techniques

Qualitative Models

Time Series Methods

Causal Methods

Delphi Method

Jury of Executive Opinion

Sales Force Composite

Consumer MarketSurvey

Naive

MovingAverage

Weighted Moving Average

ExponentialSmoothing

Trend Analysis

Seasonality AnalysisSimple

RegressionAnalysis

Multiple Regression

Analysis

MultiplicativeDecomposition

Holt’s Method We begin with an estimate of the intercept and slope at the

start (by Lin. Reg.?) lt = α*Yt + (1-α)*(lt-1 + bt-1) bt = β*(lt – lt-1) + (1- β)*bt-1 Yt is obs. demand; lt estimate of the label of the series at time t; Bt estimate od the scope of the series at time t; Ft+m = lt+ bt*m (forecast for time m into the future)

Gold Price Data

Serial Year Price Forecast Price1 2000 4400 -

2 2001 4300 4300

3 2002 4990 4271.67

4 2003 5600 5288.63

5 2004 5850 5855.18

6 2005 7000 5984.23

7 2006 8400 7541.64

8 2007 10800 9027.19

9 2008 12500 11909.06

10 2009 14500 13304.66

11 2010 18500 15506.40

12 2011 26400 20367.33

13 2012 30000 29983.46

14 2013 - 31725.68

Assumptions :- α= 0.801 β= 0.801 M=1 l1 = 4400 b1 = Y2-Y1

Year And Price

Year, Price And Forecast data

Year, Price, Forecast and MAPE

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