While financial
savings have declined, investment into valuables
(primarily gold) have risen from the average of 1 percent
of GDP in 1999–2010 to 2.7 percent of GDP in 2011/12.
Of the several reasons cited for the increased demand
for gold, there is strong evidence that gold is
increasingly being used as a hedge against inflation.4
Gold imports are highly correlated with households’
inflation expectations (the correlation is 0.83 for the
period 2006Q3–2013Q2).