I'm just back to my desk from a fact-finding mission to Shanghai and other Asian gold-trading centers where I met with gold importers, traders, jewelry manufacturers, retail outlets, and exchange officials.

The key take-away: Just as weakness in Asian markets may have contributed to the latest gold-price slump, an imminent recovery of physical demand across the region could be the catalyst to higher prices later this year.

While demand throughout the region has been soft for over a year now, most major players we met with expect at least a gradual recovery in gold demand – and, hence, imports – over the next few months.

Moreover, we could see still-bigger gains over the years ahead . . . with quarterly quantities in both China and India, by far the two biggest and most consequential national markets, eventually exceeding the record high volumes of 2013 and 2014.

Lately, the talk in Chinese financial circles is more about stock-market prospects and less about gold – but the two are certainly related. With equity prices on the Shanghai Stock Exchange off some 30 percent in the past few weeks, retail investors (who account for the lion's share of stock-market trading volume) have not yet jumped on the gold-buying bandwagon. In fact, some who have suffered big losses in equities may have cashed out of gold to meet margin calls.

If equity prices suffer a further wave of selling, some Chinese investors are expected to flee to gold as the ultimate safe-haven asset. While this may be inconsequential for equity prices it could be a big deal for gold, given the relative sizes of the two markets.

Meanwhile, government authorities are supporting the introduction of a yuan-denominated kilo bar contract for trading in the Shanghai market. Over time, this should increase activity in the local Shanghai market, shifting some of the action – and some of the market-pricing function – away from New York, London, and other gold-trading markets.