This was clever, because much of the gold inflow was a return of flight capital into the country and did not affect the balance of payments.

ECONOMIST: India

Any further escalation in that situation could drive oil prices higher and see fresh flight-to-safety buying of gold.

FORBES: A.M. Kitco Metals Roundup: Comex Gold Weaker on Corrective Pullback from Monday's Gains

Gold is generally a benefactor of this flight to riskier assets as many investors see it as a store of value.

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Flight-to-safety buying of U.S. Treasuries, German bunds, gold and the U.S. dollar all quickly came back into vogue late Monday.

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