"The recent dynamics of the gold market have worked to ensure that lower prices (caused, in part, by ETF outflows) boosted Asian demand to an extent sufficient to absorb the gold flowing from western markets," according to the report.

Here's how it works:

Gold continued to work its way through the supply chain, to be converted from London Good Delivery bar-form, via the refiners, into smaller, Asian consumer-friendly denominations of kilo-bars and below. This process is borne out by recent trade statistics. Data from Eurostat show exports of gold from the UK to Switzerland for the January – August period grew more than tenfold, to 1,016.3 t.

Consumer demand in China and India dwarfs the rest of the world. Check out the chart: