Paper 1 real-world example: The price mechanism in the gold market
The price of goods has just risen to $4,000 for the first time. This record high comes after months of strong price increases in gold. The chart shows the gold price over the last 5 years. The price increase is particularly strong since the last quarter of 2023, when it was just under $2,000 an ounce; it has doubled in less than two years. Gold is often seen as a ‘safe-haven’ asset because investors view it as a...