How these Precious metals are priced

[arjunarao]

I wanted to know how these Precious metals are priced, some times i have seen that gold's price will not change and Silver will be increasing or some times fluctuating. so what causes this.
I know about the Demand and supply concept but idont think that is the only factor for this.
could some body throw some more light on this.

Thanks
Arj

[silversurfer]

There are many, many factors that determine the price of gold and silver and pretty much all commodities.

When you see the price of gold, what you are actually seeing is the price of gold on the futures market. Or, the price that investors are locking in for future delivery.

This is determined by hedging and speculation.

Let's say a war breaks out near an important gold mine which shuts down production. What do you think happens to the price of gold?

Similarly, if many investors are convinced that inflation is on the horizon, gold may be purchased to protect wealth.

India is the world's largest buyer of gold jewelry. Normally during Indian holidays gold is purchased which typically drives up the price of gold so supply and demand rules still apply.

You are correct that supply and demand is not the only factor. The price of gold can go up as the value of the currency gold is priced in goes down. We are currently witnessing a similar event with the US dollar.

At the end of the day though, an ounce of gold is worth an ounce of gold. An ounce of silver is worth an ounce of silver.

[jamesnitp]

Gold prices changes with the seasons and even with the festivals in India. Well. demand and supply theory does have a play. But, as Diwali comes the price of gold rises and as holi it decreases. Means value increases with certain festival.I wanted to know how these Precious metals are priced, some times i have seen that gold's price will not change and Silver will be increasing or some times fluctuating. so what causes this.
I know about the Demand and supply concept but i don't think that is the only factor for this.
could some body throw some more light on this.

Thanks
Arj