Escalating Demand
"The demand for physical gold has been predominantly from China and the Middle East and I think this will continue and indeed escalate," Crichton-Watt said. "Asia is where the money is, so this is where demand will center."
Chinese and Indian jewelry demand reached a record in 2010, the World Gold Council said last month. Physical bar purchases globally climbed 63% to 204.7 metric tons in the fourth quarter, with Asia accounting for most of the buying, the council said.
Bullion assets held in exchange traded products, or ETPs, stood at 2,030.702 tons as of March 22. Holdings reached a record 2,114.60 tons on Dec. 20.
"The market is not overbought much here, so I think it would have to go much higher before we have a major correction," Crichton-Watt said. "Still, very few people own gold so the price will undoubtedly go much higher, and it will most likely end in a mania."