Why people buy gold

Despite recent hiccups, gold remains an important and popular investment for many reasons:

* In many countries gold continues to be an integral part of social and religious customs, besides      being the basic form of saving. This continues to be exceptionally true in India, which is the world's largest consumer of gold. Shakespeare called it 'the saint-seducing gold'.

* Superstition about the healing powers of gold persists. Ayurvedic medicine in India recommends gold powder and pills for many ailments.

* Gold is indestructible. It does not tarnish and is also not corroded by acid - except by a mixture of nitric and hydrochloric acids.

* Gold has aesthetic appeal. Its beauty recommends above all other metals for ornament making.

* Finally, gold is scam-free. So far, there have been no Mundra-type or Mehta-type scams in gold.

Thus, the lure of this yellow metal continues.

On the other hand, it is interesting to note that apart from its aesthetic appeal gold has no intrinsic value. You cannot eat it, drink it, or even smell it. This aspect of gold compelled Henry Ford, the founder of Ford Motors, to conclude that 'gold is the most useless thing in the world'.