It was in July, 2005 that the People's Bank of China unpegged the yuan against the dollar by setting the yuan at 8.11 to the dollar indicating a 2.1% increase in its value. The decoupling of the yuan from the dollar in the long run may perhaps lead to a lesser demand from China for US Treasuries and dollars. This, in turn, would result in a lesser dollar and higher gold price. The revaluation might increase the hazard of higher inflation in the US as a result of these higher costs. Gold prices may conceivably increase in rejoinder, as they usually do on the possibility of higher US prices for goods and services. In this context, this article throws light on the fact whether the gold market can remain bullish in the future too.

Considered to be one of the earliest celebrated metals, gold has been popular all through the history for its exquisiteness, paucity, flexibility, and eerie resistance to rust and corrosion. Gold's exclusive amalgamation of properties like its sun-like color, its supple rigidity, and, particularly, its invulnerability to decay permeated it with miraculous associations with many individuals.

If the track record of gold in the past three years is analyzed, it can be concluded that gold prices have witnessed a balanced and remarkable growth. In January 2002, gold prices per 10 gm stood at Rs. 5,453. The year 2004 has indeed been an impressive year for gold. By November 2004, the price reached Rs. 7,005. Though there has been a considerable increase in gold prices, this has not dampened consumers' penchant towards investments in gold. In reality, investors have started to identify the efficacy of gold as a competent savings medium and an alternate asset class.

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