The gold rally this year has clearly caught most investors on the wrong foot. Gold prices have moved up by a fifth since the beginning of the year.
Gold is usually seen as a hedge against inflation. It has rallied in recent months despite persistent deflation fears in the global economy. Why this has happened is a puzzle.
Meanwhile, former International Monetary Fund (IMF) chief economist Kenneth Rogoff has said that central banks in emerging markets should begin to stock up on gold rather than buying bonds issued by governments of developed countries at zero interest rates.
India has been involved in two famous gold deals.
It mortgaged 67 tonnes to the Bank of England in 1991 to meet a severe balance of payments crisis. It then bought 200 tonnes from the IMF in 2009.
It will be worth watching whether Raghuram Rajan takes the advice of his predecessor as IMF chief economist seriously enough to do a third big gold deal.