Gold Mystery Gap Explained In The Plumbing

Who doesn’t love a mystery? China has imported over 1,000 metric tonnes of gold to August 2026, a new record, but the price of gold has continued to drift lower from 2025 highs. As a ‘plumber’ who designs, builds, and modernises capital markets I think I can solve the mystery of the price-imports disconnect. The mistake in the chart below may be the assumption that imports to China are new purchases of gold, when likely we are seeing a redistribution of market maker gold inventories.

In July 2026 Hong Kong Precious Metals Clearing Corporation launched its first gold contracts for interbank clearing via Clearing Connect among 11 Bank Founder Members and Shanghai Gold Exchange International (SGEI). Five HKPMCC Founder Members – HSBC, Citi, UBS, JPMorgan, and Standard Chartered - are also the leading gold dealers of the London Bullion Market Association. Both markets settle 400-ounce London Good Delivery bars. The same five global banks also lead gold dealing on the Comex market.

HKPMCC uses a central ledger to record all transfers, settlements, and balances. Bank of China (Hong Kong), the designated vault for HKPMCC settlement, is expanding a new vault by 2,000 metric tonnes within 3 years at Hong Kong Airport, duty-free for export. This modern exchange, settlement, and vault infrastructure is expected to concentrate more global gold trading in Hong Kong, improve physical gold price discovery, and facilitate Gold Accumulation Plans and Gold Exchange Traded Funds for Asian investors. Chinese ETFs are now outpacing US peers in adding gold.

Before the HKPMCC member banks can trade gold in Hong Kong they must bring the gold to Hong Kong for good delivery and deposit it to Bank of China (Hong Kong) as the designated HKPMCC vault. The outsize imports in 2026 are not new gold being bought elsewhere, which would raise gold prices, but London Good Delivery bars vaulted elsewhere moving to the Hong Kong vault for Hong Kong trading.

Checking what is going on with dealer inventories shows gold moving out of Comex. In February 2025 Comex surged to ~38 million oz of gold (registered + eligible), but by September 2026 that had fallen to just 23.4 million oz, down 38% from the February peak. Gold has been the single largest export from US in 6 of the 8 months of export data reported in 2026.

London gold inventories, by contrast, have grown by 1,100 metric tonnes to 9,632.Gold is leaving the paper markets in the US and heading to the physical interbank markets in London and Hong Kong. Mystery solved.