When you think about it, the gold market is really one big game of bluff. Until they ban the use of derivatives in the PM's (which will never happen) how can the real supply and demand picture break through the enslaved price vs USD. There are too many paper contracts (settling in paper currency for a paper currency gain or loss) for the market forces to properly function, and they all seem to have one thing in common...to bet on the price of gold. Clearly no other function exists, or settlement via physical delivery would take place.
Interestingly, though, I read today somewhere, that Dubai is moving its gold (currently held in depository with HSBC in London) to its own vaults. They will also allow other middle eastern countries to store gold there aswell. One cant help thinking that they've had a guts full of their gold being used by others to their own end.... I suspect there may also be an element of worry concerning possible confiscation aswell,,,
