The other thing that many overlook is that the rupee has been quite weak, meaning gold priced in rupee's more expensive. India is obviously the biggest jewellry market and hence demand there has been weak for a few months.
This leads onto another point, and it is what will blow the gold market wide open. If the USD continues to weaken against most currencies (as is possible), gold priced in these currencies will become cheaper (as we are seeing in OZ). At some point gold priced in these currencies becomes very attractive to physical buyers. And then, demand for physical increases greatly, draining the market of supply.
THIS is when gold will really move and it is getting closer every day.
