(a)[4]
- Compare how the nominal and real prices of gold differed over the period 1970 to 2010. [2]
- A gold trader in 2010 said that ‘the price of gold has never been higher’. Explain whether Fig. 1 supports this claim. [2]
(b)[4]
Use the data to estimate the price elasticity of supply of scrap gold between 2003 and 2009 and say whether it is elastic or inelastic.
(c)[6]
- What changes took place in the sources of gold supply between 2001 and 2009? [2]
- Explain two possible reasons for these changes. [4]
(d)[6]
Discuss the extent to which gold resembles other consumer goods, and whether the gold market works like a consumer goods market.