Gold and silver that is officially recognized as being at least 99.5% pure and is in the form of bars or ingots rather than coins. The price of gold bullion is influenced by demand from companies that use gold to make jewellery and other products, and by perceptions of the overall economy (for example, gold becomes more popular as an investment during times of economic instability).
Reserve Bank of India and investors who hold gold typically do so in the form of bullion, but it is expensive to store and insure. Bullion is traded in the bullion market, which is primarily an OTC market open 24 hours a day. Trade volume in the bullion market is high, and most transactions are completed electronically or by phone.
Gold is unique as we know it principally as a base for jewellery and as a form of currency. The value of gold is determined by the worldwide market 24 hours a day, nearly seven days a week. Gold trades predominantly as a function of sentiment. Its price is less affected by the laws of supply and demand. To put it simply, when the hoarders feel like selling, the price drops. When they want to buy, new supply is quickly absorbed and the gold prices are driven higher.
Several factors account for an increased desire to hoard the yellow metal:
Systemic Financial Concerns: When banks and money are perceived as unstable and/or political stability is questionable, gold has often been sought as a safe store of value.
Inflation: When real rates of return in the equity, bond or real estate markets are negative, people regularly flock to gold as an asset that will maintain its value.
War or Political Crises: War and political upheaval have always sent people into gold-hoarding mode. An entire lifetime's worth of savings can be made portable and stored until it needs to be traded for foodstuffs, shelter or safe passage to a less dangerous destination.
Unlike gold, the price of silver swings between its perceived role as a store of value and its very tangible role as an industrial metal. For this reason, price fluctuations in the silver market are more volatile than gold.
So, while silver will trade roughly in line with gold as an item to be hoarded (investment demand), the industrial supply/demand equation for the metal exerts an equally strong influence on price. That equation has always fluctuated with new innovations.
Basic specifications are as mentioned below: