Prediction of the Future Development of Gold Price

Gold belongs, thanks to its extraordinary qualities, to the most interesting and well-known precious metals as far as investment is concerned. The paper aims to estimate the future development of the gold price and determine whether the gold price actually increases in times of economic recession. For the purpose of the analysis, data about the daily gold price from 2006 to July 2020 is used. To elaborate this paper, five methods of time series balancing were employed, namely Neural Networks, Decision Tree, Gradient Boosted Tree, Linear Regression, and Nearest Neighbours. The methods are applied to a training data set, and the final model is tested on the testing data set. The respective models' residues are presented in a graphic form as well as the Probability Density Histogram, Training Data Set Residues Histogram, and a graph of testing data set residues. The future development of the gold price for the next calendar year is predicted. Market participants buy gold in the first moments of the economic recession in order to keep the value of their property. Consequently, however, they lack cash and are forced to sell the gold again. A similar development can be expected now too. A global economic recession can be expected. Debtors will have to get rid of their investments, which will cause the gold price to fall dramatically. The gold price reaches its maximum value at the end of the observed period; then, it should decrease progressively to the end of 2020. At the beginning of 2021, the price should slump. Then, in the following six months, it should follow a growth path again.