Gold Prices and Demand...

C Rangarajan said the gold demand may go down which is contrary to my view.

With decline in inflation real returns on gold will increase because inflation is going down. We can purchase more by selling gold than before. Lower prices will attract more buyers on the expectation that prices will go-up one-day. Lower prices are an attraction to the buyer. This is what an expectation does. It should be a gain.

He says that we need to reduce gold demand.

But low inflation will make gold more attractive and affordable than before because real returns (inflation adjusted) will be high. It is strange that gold demand increases when inflation is low and decreases when inflation is high. High inflation will make it unattractive because prices will rise more than the price of gold...