Prediction of World Gold Price Using k-Nearest Neighbor Method

Abstract

This research aims to predict world gold prices using the k-nearest neighbor (KNN) method with secondary data from the London Bullion Market Association (LBMA) in the form of monthly time series data from January 2019 to December 2023. In the analysis process, the data is divided into two parts: 80% for training data (January 2019 - December 2022) and 20% for testing data (January - December 2023). The analysis results show that the Mean Absolute Percentage Error (MAPE) value of the KNN method is 4.5%, which indicates a very good level of accuracy. With a MAPE below 10%, the KNN model is proven to be able to accurately predict world gold prices. Gold price predictions for the period January to December 2024 show a consistent upward trend, which is influenced by factors such as global economic fluctuations, increased gold demand, and geopolitical uncertainty. These results show that the KNN model is reliable as a tool for forecasting future world gold prices.