Shortages developing in the Gold Market as demand soars

China and India remain key driers to the gold market , they totally now account for over fifty percent of both bar and coins investment and jewelery demand on a regular basis ....demand remains strong , in both these countries the saving rates are much higher than in western countries and gold is very easily available liquid asset unlike western countries , China used to make no net contribution to the Gold market they would consume their entire gold mine production and have no net effect , last year they imported 260 tons , this year they are going to import well over 300 tons may be as high as 400 tons i 2011 , s there was a huge shift on the demand side of this market , this is a market in deficit not in surplus , mine production is rising but it is not rising fast enough to keep pace with the growth of demand - Marcus Grubb, managing director of investment research at the World Gold Council

In some parts of the world gold is viewed as the protector of wealth. In North America, gold is viewed as a speculative investment. Our economists regard a rising gold price as an admission of defeat, and their disparaging attitude toward higher gold prices took on a more desperate tone in 2010. Nevertheless, gold had another remarkable year, up 25% in 2010, its tenth straight annual gain. Meanwhile, over the same 10-year period, five major currencies -- the US and Canadian dollars, the euro, the British pound and the yen -- have lost between 70% and 80% of their value. In reality, gold is not rising; currencies are falling in value, and gold can rise as far as currencies can fall. Nick discusses the three dominant medium-term trends that pushed up gold prices in 2010 (central bank buying; movement away from the US dollar; China) as well as three longer-term, irreversible trends that will put upward pressure on the gold price for years to come (the aging population; outsourcing; peak oil). In addition to these trends, more and more investors will be competing to buy a shrinking gold supply. As safe-haven demand accelerates, there will be a transition from the $200-trillion financial asset market to the $3-trillion above ground gold bullion market. About half of that $3 trillion is held by central banks as reserves; the remainder is privately held, and not for sale at any price. If the world's pension and hedge funds moved only 5% of their assets into gold, it would trade at over $5,000 per ounce. Nick's conclusion: Without any new financial crises, both mid- and long-term trends indicate that gold -- and silver -- will continue rising through 2011 and well beyond.

Related ETFs : Ishares Silver ETF (SLV), SPDR GOld ETF (GLD) SPDR GOld ETF (GLD), Powershares DB SPDR Gold ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), GoldCorp (GG)