What drives gold upwards?

While I typically ignore all predictions on the price of gold at certain time (because of very high volatility of gold prices), I highly recommend this excellent article on gold:
Four Reasons Why Gold Will Hit $1,900 in 2011

In his arcticle Peter Krauth summarizes his bullish case for gold:

• Ongoing global stimulus initiatives figure to ignite inflation, which is highly bullish for gold.
• The so-called concept of "peak gold" is real, and that even in the face of record gold prices, miners can't seem to crank out enough of the "yellow metal."
• Global demand is burgeoning as wages rise in such newly emergent markets as China and India - a trend that's not going to quit.
• Global investors remain dramatically under-invested in gold.

I could not agree more!

Here is a couple of recent articles from Seeking Alpha regarding exploding Chinese demand:

• China Gold Imports Increase Dramatically
• China Authorizes Mainland Fund to Invest in Foreign Listed Physical Gold ETFs