Chinese gold imports plus its domestic production will, this year, account for comfortably over 50% of global new mined gold output, which is currently estimated at around 2,700 tonnes annually... But what will this huge dominance of gold demand by China mean for the gold price?  Perhaps not a lot initially failing some significant announcement that the country has been quietly increasing its gold reserves substantially.  Increased demand from China is, at least to an extent, currently being offset by falling demand from India and liquidation of holdings out of the big gold-backed ETFs, although other significant gold buying countries in other parts of Asia, Russia and the Middle East are also seeing substantial increases in imports and holdings, but these do tend to pale into insignificance when set against the enormous Chinese demand.

But if the demand continues at this kind of level, with stocks of physical gold continually moving from  vulnerable western hands to more stable eastern  ones then at some stage there will be a very apparent shortage of physical metal in the West.  Increasingly gold trading will move from exchanges like COMEX to Shanghai and Hong Kong.  COMEX may become an effective irrelevance in the gold market dealing only in `paper' gold (which it effectively is already) and the physical gold price momentum will move to the east. 

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