1. GOLD FLUCTUATION AND ITS IMPACT ON INDIAN ECONOMY

2. INTRODUCTION History of gold
International monetary system - gold or silver as a means of exchange.
Gold is one of the most valuable economic indicators.
Gold’s price elasticity is negative.

3. 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 and by the rupee-dollar exchange rate.

4. Factors affecting gold price fluctuation
Currency Inflation:
When the supply of currency is inflated, the price of gold increases as the per-unit value of the currency declines.
During times of monetary contraction (i.e. when currency is “soaked up”), the price of gold goes down.

5. 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 loan agreements with the central banks of other nations.
RBI now has gold reserves over $5bn.

7. Factors The Cause An Increase In Demand:
Times of political unrest and war leads to monetary expansion.
Mining production can also play a role.
Large deficits also support high gold prices.

8. 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 for the year 2015.
To review whether international review of gold reserve (foreign exchange reserve) affects the gold prices or not.

9. Data Analysis- Growth Rate
Years Y
log y t
t*t
log y*t
-19
361
-17
289
-15
225
-13
169
-11
121
4957.6 -9 81 -7 49 -5 25
4268 -3 9 -1 1
4473.6 3 5 7 11 13 15 17 19
total
2660

10. Growth rate chart

11. Price of gold and gold reserves

12. Analysis
CO-RELATION
Column 1
Column 2 1

13. Regression Statistics
SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations 19

14. ANOVA Test ANOVA df SS MS F Significance F Regression 1 184391072.8df SS MS F
Significance F
Regression 1
Residual 17
Total 18

15. Upper 95% Upper 95.0% Coefficients Standard Error t Stat P-value
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
E-08
6828
E-13

16. Residual plot

17. RECOMENDATION
As a gold trader, the market fluctuations in the rate of gold shares 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 it’s essential to be online and have access to the rate of gold on a minute-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 and “at-a-glance” graph forms.

18. CONCLUSION
We have seen that the prices of gold were increasing from1990 to1997 and then from 1997 till 2002 the prices of gold were decreasing and after 2002 the prices of gold are increasing.
We have analyzed from compound growth rate that the prices of gold are increasing by 2.99%. We forecast from the exponential method that the gold price will be in the year  
It makes sense to buy at the lowest prices and if you can afford to stockpile your gold, you can then wait until the rate of gold increases and make your profits.

19. THANK YOU