Forecasting gold prices in India: A time series analysis using Box Jenkins methodology
DOI:
https://doi.org/10.31181/jdaic10021042026mKeywords:
gold price India, autoregressive integrated moving average (ARIMA), time series, forecasting, modellingAbstract
In India, gold holds significant cultural and economic importance. It serves not only as a financial asset but also as a symbol of tradition and social value. This study forecasts gold prices in the Indian market using the Box–Jenkins (BJ) methodology and analyzes monthly data covering the period from 2004 to 2025. Based on the empirical analysis, the ARIMA (1,1,1) model was selected as the best-fitting model. The model demonstrated strong statistical validity and low forecasting errors, indicating a high level of predictive accuracy. The forecast further predicts a steady rise in gold prices from December 2024 to April 2025. This projected increase is consistent with historical trends and seasonal consumer demand. Consumer behavior plays a significant role in influencing gold prices. This is particularly evident in the increased demand during festival and wedding seasons. Gold is also widely preferred as a hedge against inflation and economic uncertainty, which further strengthens demand. In addition, investment patterns are evolving. A growing number of individuals are adopting gold-backed ETFs and digital gold platforms, reflecting the changing investment preferences of Indian households. Macroeconomic factors also significantly influence gold prices, including currency depreciation and global market uncertainties. Collectively, these factors explain the expected upward movement in gold prices in the Indian market.
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