1. Religare Commodities Metals and Energy Research

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6. Commodities Research Commodities Research has been classified into two. Metals and Energy Research Agri Research Scope Research supports intraday traders to maximize wealth on short-term volatility. Research Prepares periodic reports for medium term wealth maximization. Research supports corporate and institutional team for Presales and Postsales Research

7. Metal Model for High Frequency prediction Variables Used NameVariables Goldgold Silversilver Coppercopper_usd Crude Oil Light sweetCrude_nymex Euro/USDeuro_usd Dow Indexdow For gold the international interbank spot data is taken in ($/Oz), silver data taken from international interbank spot in ($/Oz), copper prices are taken from LME 3 months forward ($/ton), crude oil taken from NYMEX ($/bbl), euro/usd is taken form spot interbank refrence rate, Dow taken as INDEX data declared by NYSE.

8. Correlation Matrix GoldsilverCoppereuro_usdcrude_nymexdow Gold1.00.80.60.80.40.7 silver0.81.00.40.60.00.6 Copper0.60.41.00.5 0.3 euro_usd0.80.60.51.00.30.9 crude_nymex0.40.00.50.31.00.7 dow0.70.60.30.90.01.0 Correlation analysis shows that there is a good correlation between gold and euro_usd and then gradually sloping towards silver and then dow, copper and crude_nymex. Crude has shown the least correlation to gold and then copper.

9. Regression results R 2 shows a high degree of fit, and SD for residual is well into range.

10. Analysis and conclusion The model shows a greater degree of fit i.e R2 of 0.9 and hence can be considered as a good model for gold price prediction. The scatter diagram for residual fits shows that the predictor maximum deviation ranges from -40 to +40 but well remain in the median range of $2-4. The below scatter chart plots the residual with date.

11. Scope for Future Work The selection of independent variables was subjected to availability of high frequency data (daily) so more independent variables should be introduced. Dow and euro_usd shows high correlation and hence may pose a problem of multicolinearity but P (Probability of hypothesis) has not eliminated either of the variables. Elimination of one of the variables changes the model, but eventually elimination of Dow from the model keeps the fitness intact, hence dow can be significantly removed, future work will include addition of such not correlated exogenous independent variable in the equation. The model may be fitted with Indian data for making it relevant to Indian market.

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