The prices of gold have fallen to its lowest level in three months after rising sharply over the years amid uncertainty over the global economy.

The prices fell by about US $ 58 to US $ 1614 per ounce. The price has fallen as much as 15 per cent since it touched a high of US$1907 in September. The prices have more than doubled to the current level since the global financial crisis three years ago.

Some investors invest in gold as a hedge against inflation and the US central bank believes that the inflation in the country in under control. Experts say this would discourage investors from buying more gold and the bullion’s status as a safe bet during crisis has also diminished.

Gold production is likely to see supply bottlenecks. China is the biggest producer of gold followed by Australia, the United States, Russia and South Africa. The demand in China matches its supply from domestic production while Australia and South Africa is seeing lower outputs.

Out of $1 trillion worth of private gold holdings in India, which is the biggest consumer of gold, about 60 percent is in the form if Jewelry and not available for sale. These fact