Gold is primarily a monetary asset and partly a commodity.
More than two thirds of gold's total accumulated holdings account as 'valuefor investment' with central bank reserves, private players and high-caratJewellery.
Less than one third of gold's total accumulated holdings is as a 'commodity'for Jewellery in Western markets and usage in industry.
The Gold market is highly liquid and gold held by central banks, other major institutions and retail Jewellery keep coming back to the market.
Due to large stocks of Gold as against its demand, it is argued that the coredriver of the real price of gold is stock equilibrium rather than flowequilibrium.
Economic forces that determine the price of gold are different from, and inmany cases opposed to the forces that influence most financial assets.
South Africa is the world's largest gold producer with 394 tons in 2001,followed by US and Australia.
India is the world's largest gold consumer with an annual demand of 800tons.