gold fluctuation(2)

8/3/2019 Gold Fluctuation(2)

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GOLD FLUCTUATION AND ITS IMPACT ON INDIANECONOMY


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+INTRODUCTION

History of gold

International monetary system - gold or silver as ameans of exchange.

Gold is one of the most valuable economic

indicators.

Golds price elasticity is negative.


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Rising gold prices can change destiny of many unprofitable

mines and turn them into a very successful business.

Gold is a safe investment.

Gold prices have been determined more by landed costs andby the rupee-dollar exchange rate.


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+Factors affecting gold price

fluctuationCurrency Inflation:

When the supply of currency is inflated, the price ofgold increases as the per-unit value of the currencydeclines.

During times of monetary contraction (i.e. whencurrency is soaked up), the price of gold goesdown.


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Central Banks:

Central banks can decide to sell a portion of their reserves or

buy more on the market limited to 400 tonnes.

Central banks influence the price of gold is through loanagreements with the central banks of other nations.

RBI now has gold reserves over $5bn.


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Factors The Cause An Increase InDemand:

Times of political unrest and war leads to monetary expansion.

Mining production can also play a role.

Large deficits also support high gold prices.


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+OBJECTIVE

To review the fluctuation in the gold prices.

To review the factors that affects the gold prices.

To calculate the Compound Growth Rate and then forecast forthe year 2015.

To review whether international review of gold reserve (foreignexchange reserve) affects the gold prices or not.


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+Data Analysis- Growth RateYears Y log y t t*t log y*t

1990-91 3451.52 3.538010394 -19 361 -67.22219749

1991-92 4297.63 3.633229023 -17 289 -61.764893381992-93 4103.66 3.613171371 -15 225 -54.19757057

1993-94 4531.87 3.656277443 -13 169 -47.53160676

1994-95 4667.24 3.669060134 -11 121 -40.35966147

1995-96 4957.6 3.695271483 -9 81 -33.25744335

1996-97 5070.71 3.705068773 -7 49 -25.93548141

1997-98 4347.07 3.638196634 -5 25 -18.190983171998-99 4268 3.630224411 -3 9 -10.89067323

1999-00 4393.56 3.642816562 -1 1 -3.642816562

2000-01 4473.6 3.65065715 1 1 3.65065715

2001-02 4579.12 3.660782025 3 9 10.98234607

2002-03 5332.36 3.726919462 5 25 18.63459731

2003-04 5718.95 3.7573163 7 49 26.3012141

2004-05 6145.38 3.788548743 9 81 34.09693868

2005-06 6900.56 3.838884336 11 121 42.2277277

2006-07 9240.32 3.965687011 13 169 51.55393115

2007-08 9995.62 3.999809737 15 225 59.99714606

2008-09 12889.74 4.110244157 17 289 69.87415067

2009-10 15756.09 4.197448453 19 361 79.7515206

total 125120.6 75.1176236 0 2660 34.0769021


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+Growth rate chart


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+Price of gold and gold reserves


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+Analysis

Column 1 Column 2

Column 1 1

Column 2 0.979756876 1

CO-RELATION


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SUMMARY OUTPUT

Regression Statistics

Multiple R 0.978931791

R Square 0.958307451

Adjusted R Square 0.955854948

Standard Error 686.9454905

Observations 19

REGRESSION


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+ANOVA Test

ANOVA

df SS MS F Significance F

Regression1 184391072.8 184391072.8 390.7467164 0.006255

Residual17 8022199.819 471894.107

Total18 192413272.6


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CoefficientsStandard

Errort Stat P-value Lower 95% Upper 95%

Lower

95.0%Upper 95.0%

Intercept

2363.105589 258.1041979 9.155626327 5.55095E-08

1818.55333

7

2907.65784

2

1818.55333

7 2907.657842

6828

0.181533739 0.009183531 19.76731434 3.62316E-13

0.16215818

3

0.20090929

6

0.16215818

3 0.200909296


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+Residual plot


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+RECOMENDATION

As a gold trader, the market fluctuations in the rate of goldshares and prices are sometimes difficult to keep up with,although it is your business!

It seems that things happen at the speed of light and itsessential to be online and have access to the rate of gold on aminute-to-minute basis!

You can also review analyses of the rate of gold over similar

time frames in past years and these are presented in table andat-a-glance graph forms.


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+CONCLUSION

We have seen that the prices of gold were increasing from1990to1997 and then from 1997 till 2002 the prices of gold weredecreasing and after 2002 the prices of gold are increasing.

We have analyzed from compound growth rate that the pricesof gold are increasing by 2.99%. We forecast from theexponential method that the gold price will be 8994.975815 inthe year 2015.

It makes sense to buy at the lowest prices and if you can affordto stockpile your gold, you can then wait until the rate of goldincreases and make your profits.


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THANK

YOU

gold fluctuation(2)

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