26-Jan (MarketWatch) — Uncertainty over currencies and high inflation are among the key factors often cited, if not celebrated, by gold investors to explain the spectacular rise of the precious metal in recent years, including its jump to record highs above $1,900 an ounce in 2011.

It seems the government of India, which just slapped its first import-duty increase on gold in two years, now also wants to benefit from those trends.

The idea: Using India’s position as the world’s largest consumer of gold to at least partly plug the gaping hole in the government’s finances and the nation’s current-account deficit, both cited as factors in last year’s slide in the rupee.

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PG View: The Indian government is seeking to narrow its current account deficit on the backs of gold buyers with a 73% hike in tariff. Hmmm, mightn’t taxation of gold become an attractive option elsewhere in the world as the appeal of the yellow metal as an inflation hedge continues to expand?