Gold from China may never even make it to London

Central Bank Demand to Constrain Supplies of Gold

Julian D. W. Phillips Gold Forcaster, Global Watch:
The easily mined gold of the past has been thoroughly exploited, although there may well be the occasional discovery of massive deposits in places like Mongolia or other distant regions of the world. The usual future picture will be of discoveries in politically explosive or hostile nations that contain less than 5 million ounces. Deposits of 1 million ounces will be developed, whereas before they were thought of as far too small and like their larger brothers, development will take 5 years or so still, before they come into production. Infrastructure development will be an integral part of the picture. With rising prices almost matched by rising costs, there is little incentive to mine gold in nations that will add heavy royalty taxes to these costs or even to nationalize them. The prospect of much higher prices has not led to feverish mining developments, nor will it.