American investors hoping for a rebound in gold may want to look east.
India, one of the largest buyers of the yellow metal in the world, has long been vital to keeping gold prices stable. Not only is the precious metal used in every Indian festival and wedding, it's seen as a trading currency—and a safe haven investment among Indians who are troubled by recent wild swings in the rupee.
As a result, when gold prices plummet, a rush of Indian retail buyers typically step in and boost demand. In 2012, gold made up nearly 10 percent of India's total imports, according to Thomson Reuters/Datastream. That's down slightly from the previous few years, but up from 7 percent a decade ago.
But with gold prices down 15 percent over the past three months, settling at $1,255 on Monday, some experts are worried India may not bail out the market again—at least not right away.