Till now India has been the biggest consumer of gold but gold exchange traded funds (ETFs) were not much popular in India.

However, things are changing fast in India. More and more people are now putting their money on Gold ETFs. As a sign of this, India's gold collection under exchange-traded funds rose 76 per cent in June from a year ago to 10.453 tonnes.

There has been an increase of customers by 70-80 per cent (on year). Most of the participation was from high net worth individuals and other retail investors.

Though gold collections under the ETFs are growing on year, they remain miniscule against India's imports of around 700 tonnes annually.

The gold ETFs, instruments that trade like shares and are backed by physical gold holdings, are more than three year old and may get crowded with some other funds planning their entry.

Over the past nine years, gold has managed to post successive increases in its annual average price, navigating the choppiest of waters.

In the first six months of this year, against the backdrop of very volatile global equities markets, gold bullion has gained over 13 per cent to finish at $1,242 per ounce at the end of last month on the back of continued investor concerns over the Greek debt crisis and the prospect of contagion.

Analysts see strong investment demand for gold, with investors viewing gold, a real asset, as a hedge against medium-term inflationary pressures and potential US dollar weakness, while also providing important diversification benefits as investors continue to look to gold as a safe haven asset and an alternative currency in the face of volatile currency markets.