(By Peter Krauth) We've all heard that inflation drives up gold prices.  When inflation is on the rise, investors buy more gold to hedge their portfolios.

And, with all the government bailouts and stimulus packages, it's hard to deny that inflation is coming.  After all, the money supply has more than doubled since October.

Yet few people realize that inflation may be the least of the reasons why gold prices will push higher.

Since bottoming out in 2001, gold prices have risen by nearly 300% and have twice targeted the $1000 mark.  And that's happened in a relatively "inflation-free zone."

There are other forces at work here.  This report will show you exactly why inflation is only a small part of the gold story.  And, we'll identify the best ways to profit from the coming gold rush.

Gold Trend #1: Gold Mine Production is Decreasing.

Annual worldwide mine production of gold has decreased by 9.3% since 2001.  Considering gold prices have nearly quadrupled since then, why isn't more gold being produced?  The answer is simple.  Resources are being depleted and their quality is diminishing. And, when a discovery is made, it takes about 7-10 years to get a mine permitted and into production – making it difficult to quickly ramp up gold production.

Gold Trend #2: Gold is Getting Harder to Find.

Fewer and fewer large gold discoveries are being made every year. And the discoveries that are being made tend to be in more remote and less geopolitically attractive areas.  Considering that the risks to opening any gold mine are considerable, mining companies just aren't interested in mining in areas that have significant political and geographical drawbacks.  As a result, miners are having difficulty replacing depleted resources.

Gold Trend #3: Investment Demand for Gold.

Large institutional investors, such as hedge and pension funds, are making large allocations to gold and gold shares. Individual investors are also getting in on the action, with gold exchange-traded funds (ETFs) gaining influence. SPDR Gold Trust (NYSE: GLD), the largest physically backed ETF on the planet, is now the 6th biggest holder of gold bullion with more than 1000 tons.