And, as governments focus their efforts on bailing out the banks, non-bank sources of financing are becoming more fragile.

ECONOMIST: Meltdown may have been averted. But the crunch is not over

The authorities have taken a number of steps to restrain the demand for the metal, including the federal government raising the import duty on gold and the RBI forbidding banks and non-bank financial companies from financing the purchase of gold in any form.

WSJ: India Extends Curbs on Lending Against Gold