The key to seeing this gold-buying panic in advance is to follow the flows of physical gold.
Gold prices are set to skyrocket based on a combination of supply and demand fundamentals and the ETF pro-cyclical feedback loop.By examining Swiss imports and exports, we can see where the supply and demand for physical gold is coming from and how close to balance (or imbalance) that supply and demand is.Switzerland does not produce its own gold. Some refiners may have inventories and there are gold vaults in Switzerland that are a potential source of supply. But the high-net worth individuals who keep their gold in Switzerland are long-term buy-and-hold investors and tend not to sell. On balance, these net outflows are unsustainable. If the outlfows persist, the price of gold is likely to go up because that’s the market’s solution to excess demand.
for The Daily Reckoning