India is the world’s largest gold-consuming nation. The share of gold in international market is 1.5X that of the U.S. although its GDP is only one-twentieth the size of the U.S. GDP. With its soaring rate of gold consumption, India accounts for 18% of the annual worldwide gold demand, while its share of global GDP on nominal dollar GDP is only 1.6%.
India is experiencing an 80% growth in gold investment following a relaxed trade and market limitations. The gold increased 242 per cent between March 1999 and March 2010 which is equivalent of an average annual return of 13.1 per cent and it also outpaced inflation which has increased by 30 per cent during the decade or by an average 2.7 per cent a year. Monetary authorities in India are not tremendously positive about the outlook of U.S. dollar thus their hedge against Dollar will help to set the stage for an alternative reserve currency/asset, an offer broadcasted by countries like China, France and Russia.
Despite the slump in the housing market in the past two years, property has produced the second highest return after Gold keeping PSU and BSE on third & forth respectively.

A regular issue in the gold market is what influences the price of the precious metal. Most people rationally believe that supply and demand statistics in the physical gold market will determine the price.
The fact is that futures market in New York is the largest place in the world where more gold contracts are traded than any other place. In almost all cases the price at which the physical gold changes hand depends on the price bid in New York exchange. Almost all bullion and gold coin dealers set the price of their transactions on the price traded in NYE therefore, the supply and demand at the NY exchange is probably the single most important factor (short term) in determining the forecast of gold price. We can see huge changes in the supply and demand in the physical market, but if the price does not first change at the exchange it is not likely to change the price of the gold in the international markets.

Gold forecast remains bullish as it continues to provide a hedge against weakness in fiat currencies and further confusion in the markets. Gold would be treated as the only solid asset sought by both ordinary people and foreign central banks with further deterioration of fiat money.
Gold investments are gripping the market as prices of the precious metal are inclining. Gold forecast for the month of March is stable and growing therefore investors are good to go with further investments in gold which would further help them in the upcoming months. A different trend has been seen in the market where total demand was down drastically in all categories – jewelry demand was down 32% while total demand for all uses including retail investment, industrial demand, and electronic trading fund investment was down 36%, a relatively huge decline in demand. Gold is likely to remain highly sought after as a store of wealth and it will not be surprising to see gold prices rise to, perhaps significantly, new highs.

Gold is exclusive because it does not bring any credit risk. Gold is no one’s liability. There is no risk of non payments for a coupon or redemption for bonds and that a company will go out of business, as for equity. And dissimilar to a currency, the value of gold cannot be affected by the financial policies of the issuing country or destabilized by inflation in that country. A 24-hour trading, wide range of buyers – from the jewelry sector to financial institutions to manufacturers of industrial products – and a wide range of investment channels available, including coins and bars, jewelry, exchange-traded funds, certificates and structured products, makes the liquidity risk very minimal. The gold market is vast and profitable, because of the fact that gold can be traded at narrower spreads and more rapidly than many competing diversifiers or even mainstream investments.
Gold is subject to market risk but many of the risks associated with gold prices are very different from the risks associated with other assets, a factor which enhances gold’s charisma as safest and most secured investments. The specific risks, to which bonds and equities are exposed, including stress on the health of the government and corporate sector during an economic downturn, are not shared by gold.
Volatility is a type of measure for market risk. It measures the spreading of returns for a given security or market index. If an asset is volatile, risk increases. The gold price is in general less volatile than other commodity prices. This is because of the depth and liquidity of the gold market, which is sustained by the availability of large above-ground stocks of gold. Because gold is almost everlasting, nearly all of the gold which has ever been mined still exists. Unlike many other commodities such as, oil or platinum, the geographical diversity of modern mine production further reduces the chances of supply shocks from any specific country or region having an unnecessary impact on the price. As a result, gold is to some extent less volatile than heavily traded blue-chip stock market indices such as the FTSE 100 or the S&P 500.

Market of gold is very fascinating if one decides to start investing in it. It is very dynamic but the investments should be made for mid-term to long-term. Gold has proven to be an asset that has little connection with most financial assets, both in expansionary and recessionary periods.For gold, important fluctuation in the dollar exchange rate against the euro and yen are very important. The weaker the dollar is against these currencies, the more the value of metal rises. A similar situation exists with oil prices. With the increase of oil prices, investors begin to hedge the risk of inflation by buying gold. In mid-term and long-term, price of gold will rise because gold outperforms other assets such as stocks and bonds at times of high inflation as is currently the case, and can offer opportunities for impressive returns.

Gold has dropped roughly twelve percent since unusual record of $1,226.10 in December as the dollar gained on escalating fiscal worries in the euro zone. The month of February 2010 is the best time to invest in Gold. For small scale buyers, bullion coins or gold certificates would do because the ultimate dollar hedge investment will always be gold. Investing in gold through possession of the metal itself, mutual funds, or gold mining stock grants the most direct counter to the dollar. As the dollar falls, gold will eventually rise.
Gold is the only real money and its value cannot be changed or controlled by government fiat-the underlying reason for governments to go off the gold standard, unfortunately. Gold’s value will rise based on the pure forces of supply and demand.