- Gold (Chemical Symbol-Au) is primarily a monetary asset and partly a commodity.
- Gold is the world's oldest international currency.
- Gold is an important element of global monetary reserves.
- With regards to investment value, more than two-thirds of gold's total accumulated holdings is with central banks' reserves, private players, and held in the form of high-karat jewellery.
- Less than one-third of gold's total accumulated holdings are used as “commodity” for jewellery in the western markets and industry.
The gold market is highly liquid. Gold held by central banks and other major institutions and in the
form of retail jewellery is reinvested in the market.
Effective diversification during “stress” periods: Traditional methods of portfolio diversification often fail when they are most needed, that is during financial “stress” (instability). On these occasions, the correlations and volatilities of return for most asset classes (including traditional diversifies such as bonds and alternative assets) increase, thus reducing the intended “cushioning” effect of a diversified portfolio.
Gold In India
India is the largest market for gold jewellery in the world and a key driver of the global gold demand. The
domestic drivers of gold demand are largely independent of outside forces. Indian households hold the
largest stock of gold in the world. Two thirds of the Indian demand for gold comes from the rural parts of the
country. In 2011, gold's role as an inflation hedge bolstered its appeal in India. The nation witnessed jewellery
and investment demand of 933.4 MT. The nation was by far the largest single investment market in 2011
