Many articles say that the gold price is manipulated and some analysts predict that the bubble will burst. (1)
We think that understanding how gold can be influenced by different factors is an interesting research topic. The variation of the gold price is a real-world problem which evaluates through the interaction of a group of different elements.
It seems that the gold price is a very complex problem understanding. Of course everybody has his own thinking about the problem according to his own filter.
But this approach is most of the time not valuable because there is not a full view of all the variables and their link. In a context of a growing demand and a constant supply, be able to determine if gold price will continue to increase and if this asset will represent a safe investment for the new decade.
In September 2011, gold price surged a record, $1,274,75 an ounce. According to the Commodities guru George Soros “gold was the ultimate bubble" and was no longer a safe investment.
On the other hand, the research conducts by metal consultant GFMS predicted that gold will hit a new record of $1,300 an ounce. (2)
Who was right? Both of them.
This example illustrates how complex is the problem.
At the time of this research the price of gold is $1,316,79 an ounce.
Wealthy persons are concerned by preserving their fortune, they also look to maximise their wealth and to keep it safe. Many options are available to investors, despite buillion is a popular asset on a long-term portfolio, nowadays is it gold a safe investment? That is a good question. Also understanding the impact of gold on the economy and how it is link to poverty might be interesting. To analyze an issue, one must first define it.
In order to get a better understanding of the gold price we will model this complex problem. Our goal is to visualize the interconnection of elements and be able to identify feedback loops with the aim to understand the complexity of the problem.
We will analyse different documents from various sources, underline variables and identify their relationships over time.