We’e still in a deflationary economy and the value of gold is based entirely on psychology and psychiatry, and not on economics or physics. Caveat emptor.....
I will be using your paper money for toilet paper....
That means that demand for the small percentage in private hands as well as the price asked by miners for new quantities gives us the trading price ~ just like everything else.
One more time ~ gold has two markets ~ government and they ain't selling, and private sector, where there's actually an industrial need for it.
The private market is tiny compared to the total quantity held or controlled by governments (or their proxies). There's no there there!
Both Chinese and Indians are big personal buyers of gold.
Are they both in a bit of a slump recently? Add the increased effeciency of microscopic gold mining, often tied in with other metals like copper and the “cost” contimues to be relatively low.
Miners are unlikely to slow down production just to bump the price as they all are also interested in recovering mine development and infastructure costs, even at lowered margins.