The movement of gold and silver from West to East has transformed the global gold market in fundamental ways.
The process playing itself out goes roughly like this:
ETF investors in the US and other developed markets offload their gold holdings allocated to them and held in the UK, where most of the world's gold vaults are to be found.
From the UK the bullion is exported to Switzerland where the globe's gold refineries are concentrated, where it's melted down and recast into smaller bars.
From Switzerland, which last year exported 2,777 tonnes worth $132 billion, the bullion is shipped to China (much of it via Hong Kong) and India and other growing gold consuming nations in Asia led by Vietnam and Indonesia.
Gold held in ETFs have dropped to the lowest levels since 2008 and after a short-lived and modest bout of buying earlier this year, outflows have largely resumed.
Swiss customs data for May published today show a marked slowing in these flows via the global gold trade hub according to Goldreporter.de.
Gold delivery from London to Switzerland increased by 32% to 31.7 tonnes, pushing overall imports into Switzerland for May up 5.5% to 128 tonnes compared to April.
At the same time the European nation's exports of gold dropped 96.6 tonnes down 13.6% on April which was already a dismal month when exports plummeted 21%.
May's weak numbers were led by a 59% drop in exports to Hong Kong to just over 10 tonnes. Cargoes going to mainland China plummeted by 83.5% to a mere two tonnes, compared to 37 tonnes back in February.
Indian demand following sweeping political changes and hopes of economic recovery stayed relatively strong declining a fraction to 32.6 tonnes.
At the same time buyers in Asia have become less willing to pay high premiums for this gold.
Shanghai premiums topped out at $37 an ounce above the London fix but has now returned to par (or below).
In India it hit a highs of $170 above during the height of the festival and wedding season last year, but has now dropped to below $10 an ounce
Switzerland produces no gold itself. In 2012 and Alpine village turned down a $1.2 billion project which would've been the country's first and only gold mine.
Read more at Goldreporter.de