Source: AlternativeMarketData Publication Date: November 2024 Region: Worldwide Survey time period: November 2024
Note: 1st Working Day Of Each Month Is Used for Analysis
Analysis of the 2025 Gold Prices Forecast Methodology
The 2025 forecast for gold prices was calculated using a logical and structured approach, leveraging historical data from 2023 and 2024. The goal was to predict a likely trend for 2025 by smoothing the fluctuations in the prior years and gravitating toward a mean value. Below is an analysis of how the forecast was derived:
1. Data Collection
2023 Data: We used the historical monthly gold price data from 2023, which demonstrated a steady upward trend over the year.
2024 Data: The monthly gold prices from 2024 showed more volatility, with periods of rapid growth, reflecting potential market uncertainties or macroeconomic factors.
2. Establishing the Mean
To create a balanced prediction for 2025, we calculated the mean value of both 2023 and 2024 datasets. This mean serves as the “equilibrium point,” representing the long-term average that gold prices might converge towards, assuming no significant market disruptions.
The formula used to calculate the mean:
3. Smoothing the Forecast
The 2025 forecast was designed to gradually decrease toward the calculated mean while retaining elements of the 2023 and 2024 trends. To achieve this:
For each month, we took the average of the 2023 and 2024 values for that month.
This monthly average was then adjusted closer to the overall mean of 2023 and 2024 to create a “soft landing” effect.
Formula:
This approach ensures:
Smoothing: Short-term fluctuations in 2023 and 2024 are reduced.
Gradual Transition: The values slowly move toward the mean rather than an abrupt shift, making the forecast realistic and market-aligned.
4. Visualization
The forecast was added as a third dataset to the chart, alongside the 2023 and 2024 data. By comparing these datasets:
Users can visually observe the gradual transition of the 2025 forecast towards the mean.
The bar and line chart formats provide flexibility for analyzing trends and relationships.
5. Assumptions and Limitations
Assumptions:
No major geopolitical, economic, or financial disruptions occur in 2025.
Historical trends and averages remain relevant predictors for future performance.
Limitations:
This method does not account for unforeseen market shocks or shifts in gold demand.
External factors like inflation, currency fluctuations, or central bank policies are not explicitly modeled.
Conclusion
The 2025 Gold prices forecast provides a balanced and realistic projection based on historical trends while introducing smoothing to account for market stabilization. This approach is ideal for long-term analysis and planning, though it may need adjustment as new data becomes available or if market conditions change dramatically.
