Is the demand for gold insatiable?

This refers to your edit ‘Golden tangle (Business Standard dated 8/6/13)...The Govt is solely responsible for the mad craze for gold in India and now the demand is price inelastic. The reasons can be found in Govt's wrong policies and inaction in respect of vital economic policies badly needed by the economy. Failure of the Govt to contain inflation, corruption and black money is the major cause for diverting attention of the people to gold. Greed has overtaken the market and pricing of products has no relationship to demand and supply. Gold only can be the safest hedge in the present state of the economy is more than proved. Corruption is beyond anybody’s imagination and it is rampant even in villages and small suburbs and irrespective of one’s status and educational background among people  many of whom make hell of money in black and a large segment of it is diverted towards gold consumption. Added to this Govt's policies to import gold to satisfy the gold bullion and jewellery merchants and sell gold through post offices and banks have made Gold a most possessive item at any cost by those who have surplus. Further, the scams and frauds  now and then getting reported in the financial system, the steep fall of stock market, absence of financial instruments with safety features and positive returns covering inflation for public to save have attracted people to invest in Gold. Along with the solution offered through your editorial, the Govt should identify the blocks and people from where the demand is insatiable to curb the demand.As long as Corruption and black money persist in the economy the demand for gold cannot be contained so easily.

Dr.T.V.Gopalakrishnan