Gold is consumed in many industrial sectors such as electronics, aerospace, medicine, computers, jewelry and investment. The movement of gold price will widely affect to the economic. This paper applied system dynamics, which is the systematic thinking constructed from the relationship among factors in a system to demonstrate dynamic behavior of the gold price system. The objectives of this paper are to study and analyze the behavior of gold price and forecast it. The gold price system dynamic model will support the decision making and planning for management. The gold price system dynamic is constructed using Vensim Professional Version program. Eviews program is used to develop the regression function between factors. This paper simulates the gold price system by using the average monthly data. We forecasted the price of gold from January 2010 to June 2011 to evaluate the model accuracy. Using static input data that excludes qualitative factors such as political chaos and economic crisis events, the mean absolute percent error is approximately 9%. By updating the input data to the system dynamics and taking into account those qualitatative factors, we can reduce the mean absolute percent error to only 2%.
