Gold Mania - A Comparative Study of India, China and United States

The study which attempts to forecast the Gold Consumer demand in India, China and USA during the period from Quarter 1 1996 to Quarter 4 2013 using econometric analysis for time series forecasting which is most popular model named Box-Jenkins's time-series autoregressive integrated moving average (ARIMA) model for forecasting. The study is based on secondary data obtained from World Gold Council database and NSE database. In India, gold is a element of the fabric of Indian culture, an inseparable ingredient of the Indian belief system. The core rationale for the potency of demand in India are the strong economy, the augmentation of women population in gold's key target market occasioned by demographic, economic and attitudinal changes and the customary cultural fellow feeling to the metal. Chinese gold consumers have exhibited a surprisingly unswerving attitude toward gold. Tailwinds propelling Chinese demand included; the sustained urbanization of the population; the supremacy of 24 carat pure gold and its function as a savings proxy and emergent availability of gold investment products to a populace with US increasing awareness of gold's investment properties -predominantly its role as an inflation hedge. In United States, the innovation prospective is fading due to the competition from emerging Asia and Japan and less-inviting environment for foreign researchers and entrepreneurs. The global financial crisis has sapped investor's buoyancy in paper assets. By contrast, the appeal for gold as an anchor has been extremely boosted and its price has been bid up accordingly. More explicitly, results reveal that ARIMA (4,1,4)is the most suitable model to be used to forecast India's Consumer Gold demand, (3,1,4) is the most suitable model to be used to forecast China and United States Consumer Gold demand.