Traditionally, Gold has been used as money and also served as a relative standard for currency equivalents specific to economic regions or countries, until recent times. India continued to remain world's second biggest consumer of Gold with 67% surge in imports in 2017 from the previous year. Gold demand in India rose to 454.4 tonnes between January-September 2017.

From an overall evaluation it is seen that India has a traditional and stable market for gold consumption. There is increase in demand from Ornamental and Electronic Sectors. Gold is considered a valuable asset, for investments and bank reserves. A huge gap exists between demand and indigenous production which is likely to continue

The market participants engaged in import, exports, domestic trading, and manufacturing of gold and gold jewelleries are exposed to price risk. Commodity derivatives product provide an effective hedging tool much to the advantage of market participants