The Prediction of Stock Index and Gold Price Using ARIMA Model

Abstract

This study uses ARIMA modeling to forecast how the behavior of the US stock market and gold prices following an interest rate hike by the Federal Reserve. This paper also provides valuable decision-making guidance to investors with respect to the stock market and gold price indices. The primary dataset utilized in the methodology section revolves around the S&P 500 Index, whereas the secondary dataset mainly focuses on gold Price. Based on these findings, it is projected that the S&P 500 will experience a decline over the next three months, while gold prices, on the contrary, are expected to witness an increase. Based on these findings, it is recommended that investors allocate a larger proportion of their investment towards gold, while simultaneously reducing their exposure to stocks in the foreseeable future. This strategic approach aims to optimize potential gains and mitigate risks, aligning with prudent investment practices in a volatile market environment.