China’s emergence as the world’s biggest consumer of gold needs to be considered alongside a lesser appreciated fact: The country is also the biggest producer of the yellow metal.

This week, the World Gold Council said in a quarterly report that Chinese buyers overtook Indians as the globe's biggest purchasers of gold in the first three months of this year. Despite producing nearly 351 metric tons of the metal in 2010, China's gold demand last year hit 700 tons, meaning the country may continue to absorb bullion imports.