By Manisha Gupta, Deepshikha Sharma and Isha Dalal, CNBC-TV18

Price of gold plunged to below USD 800 per ounce level for the first time in eight months. These falling prices is luring buyers. India, the world's biggest buyer of bullion may increase its gold imports for the first time in nearly 12 months. The first half of 2008 saw high and volatile gold prices driving down demand. But in the last few weeks, prices have plunged and India is seeing a sudden rush of imports. In July, India imported about 30 tonnes, that's 25% more than the 24 tonnes bought in June. The demand is so high that buyers are ready to pay a premium of USD 3-4 per ounce.
 
Bhargav Vaidya, Bullion Analyst said, "We don't buy as per season, we buy as per price, this is one of the best examples. We are seeing an import of almost five tonnes a day, which would not be even 500 kg in normal conditions two years ago."

Infact, in these times of high inflation and volatile markets gold makes for a very smart investment. Sanjiv Shah, Executive Director of Benchmark Asset Management Company said, "Gold is very useful in times of inflation. When you look at any currency, whether it is dollar or euro or anything else, the monetary policy of that instrument, decides how inflationary expectations are going to be looked at. While in gold people think that gold always beats inflation and people try to invest in gold."

Investment in gold Exchange Traded Funds or ETFs on NSE have hit a record high of 650 tonnes. That's not all. Average daily volumes on the MCX has almost doubled to nearly Rs 8000 crore in the last 10-12 days. There is enough evidence that gold is glittering like never before.