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Log-Periodic Oscillation Analysis and Possible Burst of the "Gold Bubble" in April - June 2011


  • Sergey V. Tsirel
  • Askar Akaev
  • Alexey Fomin
  • Andrey V. Korotayev


This working paper analyzes the gold price dynamics on the basis of methodology developed by Didier Sornette. Our calculations indicate that this dynamics is close to the one of the "bubbles" studied by Sornette and that the most probable timing of the "burst of the gold bubble" is April - June 2011. The obtained result has been additionally checked with two different methods. First of all, we have compared the pattern of changes of the forecasted timing of the gold bubble crash with the retrospective changes of forecasts of the oil bubble crash (that took place in July 2008). This comparison indicates that the period when the timing of the crash tended to change is close to the end, and the burst of the gold bubble is the most probable in May or June 2011. Secondly, we used the estimates of critical time for the hyperbolic trend (that has been shown in our previous publications to be typical for many socioeconomic processes). Our calculations with this method also indicate May - June 2011 as the most probable time of the burst of the gold bubble. Naturally, this forecast should not be regarded as an exact prediction as this implies the stability of the finance policies of the USA, European Union, and China, whereas a significant intervention of giant players (like the Federal Reserve System, or the Central Bank of China) could affect the course of the exchange game in a rather significant way. We also analyze possible consequences of the burst of the "gold bubble".

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  • Sergey V. Tsirel & Askar Akaev & Alexey Fomin & Andrey V. Korotayev, 2010. "Log-Periodic Oscillation Analysis and Possible Burst of the "Gold Bubble" in April - June 2011," Papers 1012.4118,
  • Handle: RePEc:arx:papers:1012.4118

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    References listed on IDEAS

    1. Tim Leung & Ronnie Sircar, 2009. "Accounting For Risk Aversion, Vesting, Job Termination Risk And Multiple Exercises In Valuation Of Employee Stock Options," Mathematical Finance, Wiley Blackwell, vol. 19(1), pages 99-128.
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    Cited by:

    1. Askar Akaev & Andrey Korotayev, 2016. "Global economic dynamics of the forthcoming years. A forecast," Papers 1612.09189,
    2. Alexey Fomin & Andrey Korotayev & Julia Zinkina, 2016. "Negative oil price bubble is likely to burst in March - May 2016. A forecast on the basis of the law of log-periodical dynamics," Papers 1601.04341,

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