What do you think happens when the supply of gold increases dramatically during good economic times

An increased supply of gold during good economic times causes a reduction in the value of the gold thus the price of gold reduces.

Explanation:

Good economic times are times when the economy is growing and expanding. This means that the supply of money is very high thus most people can afford lines of credit. This increases the quantity of disposable income available to most people. The people in such type of an economy feel wealthier and thus are ready to spend on goods and services that are considered luxuries. At the same when there is excessive spending, most people buy gold due to the fear of inflation since it has been traditionally believed that holding currency in form of gold is a safe measure against inflation. This usually causes the price of gold to rise.

However, in our case, the supply of gold has increased dramatically. Gold, just like any other commodity is affected by the forces and supply. When the supply of gold exceeds the demand, there will be an excess that won't be bought by consumers. To ensure that there is a balance, the price of gold will reduce.