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Market analysts suggest that holders of physical gold control the market.

Whether it is gold bars or coins, whoever actually owns those pieces of gold are the investors who drive the market according to Julian Phillips from The Gold Forecaster. 

Yes, there are many ways to invest in gold and a plenty of reasons to do so, but most investors never actually own gold per se, but instead buy options or stocks.

Gold shares may be investments in corporations rather than in physical bullion, while options do not actually involve gold at all. The money in the future is in the bullion...

“Bullion holdings, due to their intrinsic value as a precious metal, provide a level of security not found in most other financial instruments,” says Bill Hionas of Pan American Metals of Miami (PAMM). “Investors are purchasing a true physical holding in a precious metal.”

As the U.S. government continues to print money as we fall deeper and deeper into debt, there is really no other way to insure your finances and protect your wealth than to own physical gold and silver. 

Commodities Exchange, Inc. (COMEX) notices physical movement in around 5 percent of its gold transactions and says that those -who physically own large quantities of gold- investors, individuals, institutions and governments are the ones who control the price.

With China's recent announcement of inflation reaching its highest level for nearly three years with its consumer-price index rose 5.5 percent in May from a year earlier, gold is on everyone's mind.

Overnight, China raised bank-reserve requirements in reaction to soaring inflation data and gold prices in turn soared to a high of $1,524.90 on the new data. The reason for this is that gold is considered the best way to hedge against inflation and to create financial stability and security in difficult economic times – whether in China or the U.S.

"Gold is in a unique position—if the economy is showing improvement its going to move higher on inflation concerns, and if the global economy is struggling it's going to move up on low rates and being an alternative investment, so it's in a position to benefit either way," said Matt Zeman, head of trading at Kingsview Financial.

But if you are concerned about the gold market being a bit bearish, have no fear...