Aside from strong physical demand, Russia. Turkey and Kazakhstan are snatching up gold for their sovereign funds and central banks. 

 "Prices are roaring higher with reports of increased physical buying worldwide." said Michael Smith of Y&K Futures & Options in Port Saint Lucie, Florida. "News about central banks buying is very bullish"

 U.S. Mint sale of gold coins is soaring as well. In March only 62,000 ounces were sold, but in April thus far, the number is 196,5000 ounces. 

 However, ETFs remain a trouble spot for gold as they continue to shed holdings, although the pace is slackening. The dumping of gold assets by ETFs is expected to continue, although the influence should be less and less as markets stabilize. A bigger question is this: What is a gold-backed fund going to do when it dumps more and more and more gold? What is their core business and how do they manage it?

 There is a possibility at this juncture that we will see a divergence between the prices of physical gold, spot gold and gold futures. It's a little unusual, but from time to time traders (as opposed to investors) hedge one for of a holding against another. 

 However, we have to be aware that the conditions that are luring in physical buyers could end at any time. What is the threshold price where the small buyer says, "No"?

 "Physical buying has been strong but the question is where are these buyers are coming from? There could be a fundamental shift from commercial buying of paper assets into physical gold. If that's the case, gold prices may continue to go up," said Joyce Liu at Phillip Futures.