There is only one group to watch to understand the gold market - central banks. The impact of central banks is twofold, market expectation on global inflation and uncertainty, and central bank buying.
Retail flows will be driven by their views concerning central bank policy behavior. More monetizing of securities to defeat deflation will increase prices which will increase demand for gold as an inflation hedge. If central banks, do not get this reinflate policy right, there will be more macro uncertainty which will push gold higher. Sovereign and bank defaults will create flight to safety demand.
The other hard to measure demand is the buying by central banks. If you do not want dollars or euros or pounds, the natural alternative is gold. Any central that does not have large gold resources is willing to step up to make large purchases. The sizes are in tonnes. The emerging market central banks with large foreign resources such as the Middle East banks will be the buyers. They will take the other side of retail selling in large price declines. if central banks want to raise prices, it would be natural for them to also be buyers of gold.
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