We like gold as an asset class for a plethora of reasons. Firstly, with a stable rupee, the Indian gold price will be less vulnerable to fluctuations of the dollar as far as gold is concerned. This was a problem when the rupee was losing value vis-a-vis the dollar. Secondly, gold has managed to beat inflation consistently over the last 15 years and that by itself gives a good hedge to investors to put money in gold. Thirdly, more central banks are likely to shift a part of their reserves to gold and China has already shown the way. Many European banks are also showing a similar preference for gold. Greater central bank demand is likely to raise the demand for gold and it will be followed by ETF demand. Last, but not the least, it is possible to hold gold in India in a variety of forms like gold ETFs, gold bonds, gold coins etc. This offers a lot more flexibility to the investor to invest in gold today at a lower cost. In a nutshell, gold must form a part of any investor’s portfolio at this point in time. As an inflation-hedge and source of stability, gold is likely to add a lot of value to your portfolio. Of course, you need to consult your financial advisor on the exact proportion of allocation.