"So once we acknowledge how big the discrepancy is between the actual true level of physical gold demand versus the annual "supply", the obvious questions present themselves: who are the sellers delivering the gold to match the enormous increase in physical demand? What entities are releasing physical gold onto the market without reporting it? Where is all the gold coming from? There is only one possible candidate: the Western central banks. It may very well be that a large portion of physical gold currently flowing to new buyers is actually coming from the Western central banks themselves. They are the only holders of physical gold who are capable of supplying gold in a quantity and manner that cannot be readily tracked. They are also the very entities whose actions have driven investors back into gold in the first place. Gold is, after all, a hedge against their collective irresponsibility and they have showcased their capacity in that regard quite enthusiastically over the past decade, especially since 2008." http://www.tfmetalsreport.com/blog/4237/sprott-update-do-western-central-banks-have-any-gold-left
a fair bit of the gold stock isn't for sale at any price we are likely to see in short or medium term and maybe not at all so supply and demand is still relevant. demand has risen and so has the price even with the stock of gold in existence.
