Forecasting Of Malaysia Gold Price with Exponential Smoothing

Abstract

Gold is a precious asset has attract the investors to invest. Investors has interest to know the basic knowledge about gold price and the prediction price. Prediction price will help the investors to determine the benchmark of the gold price. However, various method can be predict the price. Therefore, the objective of this study to determine the best model to forecast the Malaysia gold price. This study focus used Exponential Smoothing (ETS) forecasting models which are Single Exponential Smoothing (SES), Double Exponential Smoothing (DES), and Holt-Winters Exponential Smoothing. The best model is used to forecast the gold price in Malaysia for the next 12 months by using data from March 2016 until February 2021.The best model is determined by choosing the lowest Root Mean Squared Error (RMSE) value. The outcome for the lowest RMSE shows that DES is the best model for forecasting the gold price in Malaysia for the next 12 months. The result of the forecasting shows that the gold price will decrease from March 2021 until February 2022, and this could be due to the COVID-19 pandemic in Malaysia. Therefore, it will be a good opportunity for investors to buy gold in this period since the price is decreased and investors can sell it at the highest price in the future.