Predicting Gold Price Movement Using Long Short-Term Memory Model

Azaria Beryl Nagata, Moch Sjamsul Hidajat, Dibyo Adi Wibowo, Widyatmoko Widyatmoko, Noorayisahbe Bt Mohd Yaacob


Gold, as a valuable commodity, has been a primary focus in the global financial market. It is often utilized as an investment instrument due to the belief in its potential price appreciation. However, the unpredictable and complex movement of gold prices poses a significant challenge in investment decision-making. Therefore, this research aims to address this issue by proposing the use of the Long Short-Term Memory (LSTM) model in time series analysis. LSTM is a robust approach to understanding patterns and trends in gold price data over time. In the context of time series analysis, historical gold price data includes daily, weekly, and monthly datasets. Each model with its respective dataset is useful for identifying patterns in gold prices. The daily model achieves an MSE of 452.2284140627481 and an RMSE of 21.26566279387379. The weekly model achieves an MSE of 1346.1816584357384 and an RMSE of 36.69034830082345. The monthly model achieves an MSE of 11649.597907584808 and an RMSE of 107.93330305139747. With these RMSE results, the LSTM model can predict gold prices effectively. Based on the trained models, it can also be concluded that gold prices exhibit long-term temporal dependence.

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