Predicting the Behavior of Gold Price Using Markov Chains and Markov Chains of the Fuzzy States

Abstract

In this work we consider gold prices as a case study. Closing retraction is studied as a fuzzy concept and several types of fuzzy numbers are applied to triangular, trapezoidal, parabolic and K-Trapezoidal-Triangular fuzzy numbers. We construct a Markov chain (MC) and a Markov chain with fuzzy states (MCFS) and compare between them. The two models MC and MCFS are used to predict the behavior of gold price. At the end, we estimate the expected return price in specific months. We reach that MCFS has more accuracy than the MC