“We are seeing record inflows into gold ETFs. I’ve been saying for over a year that there is very little gold vaulted in London to support that demand, so you are going to see a scramble for physical gold, which is what the ETFs have to have. That, to me, is the big story.
Investors will buy an ETF and then they will see something like the Barclays ETF have a glitch and they will start to ask questions about whether synthetics or surrogates for physical gold are the right thing to own because of the counterparty risks and the type of things we saw with Barclays.
So we will start to see more investors move up the food chain into physical metal, but the metal just isn’t available at this price level. You will then see a serious scramble for physical gold and that will translate in to much, much higher prices than what is being quoted today.”