Schmidt is right about one thing - gold is not so much a game of supply & demand anymore. Gold ETFs have not been good for gold. The fact that you can buy & sell kilograms of gold in a couple of seconds without virtually ever touching an oz means that you can theoretically single-handedly own more virtual gold than there is physical gold on this planet. The same goes for other commodities.

This is why gold measured in currencies never really gives a reliable view of what the purchasing power is of a troy oz.

This is why premiums are now being paid for physical gold. If I take my krugerrands to a good gold dealer here, I get spot price +3%. This premium will increase along with increasing speculation. In short, there are basically two prices for gold: one for virtual gold and one for physical gold. Physical gold will prove to be the better investment in the long run.