India's economic reforms have moved to a new high over the past decade, including the liberalization of the gold regime, which addressed a break with the past and may lay the ground for further reform.

The story of gold has a deeper message, one that has none of the transitory qualities of what we choose to use as money. Seen in this broader sense, the story of gold has no ending. The demand for gold can be broadly categorized into consumption demand and investment demand. Consumption demand comprises the demand in the jewelry and industrial segments.

Gold represents an investment avenue in the developing world apart from being a store of value. Unlike currencies which are affected by political and economic risk, gold remains largely unaffected. While the central banks have the power to control the money supply in case of currencies, it is not possible in case of gold. Currencies are also subject to depreciation against inflation and other currencies. Similarly, there seems to be strong linkages between commodity prices (aluminum, steel, copper, etc.) and the movement of interest and inflation rates.

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