From the two articles below, it seems the Middle East and India have taken an even greater interest in gold as a result of the financial meltdown.

Regards - VHF

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Saudi Arabia Buys $3.5B of Gold In Two Weeks

Peter J. Cooper

November 13, 2008

There has been an unprecedented surge in Saudi gold purchases in the past two weeks with over $3.5 billion being spent on the yellow metal, reported Gulf News citing local industry sources.

Gold market expert Sami Al Mohna told the leading regional newspaper that this buying had substantially increased the gold reserves of the country: ‘Many Saudi investors see this as the right time for making investments in gold as the price is the most reasonable one at present’.

He said gold was seen as a traditional safe haven at a time of global financial turmoil. Gulf regional stock markets have fallen very sharply since early October, leading to an exodus of cash which needs to find a safe haven.

Gold is currently trading at prices similar to a year ago, and 30 per cent off its March peak. Saudi investors clearly think this is the right time to buy and are piling into gold.

News about the Saudi gold rush is bound to fuel speculation about the alleged large physical gold transactions that have been taking place at prices will above the spot price set in the futures market. It is very unlikely that such a large hoard of physical gold could have been bought for the depressed current price.

Market analysts such as the legendary gold bug Jim Sinclair have pointed out that if less than two thousand millionaires insisted on delivery of physical gold at the end of their futures contracts, as is their legal right, then the spot gold market would jump to new highs.

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Gold prices may go up soon: MMTC chief

Economic Times

November 11, 2008

PANAJI: The rising demand for gold in Europe may soon lead to a temporary shortage of the yellow metal in India, sparking a sudden rise in gold prices, a leading bullion importing agency official has said.

"Today Europe is not able to supply gold to India, because European investors have started heavily investing in gold," Minerals and Metals Trading Corp (MMTC) chief general manager Asheesh Majumdar said.

Majumdar, who heads MMTC's precious metals division, was in Goa to announce the second edition of the agency's gold exhibition The four-day event last year witnessed daily sales of almost Rs 1 crore.

Despite the global meltdown, gold sales in India went up nearly 15 percent this year. "People have learnt that instead of investing in the stock market, which has been volatile, gold offers them steady and assured returns," Majumdar said.

Meanwhile, Gitanjali Gems Ltd, co-hosts of the gold jewellery exhibition, announced that it would tie up with MMTC to set up jewellery shops across the country.