To my thinking the potentially bigger impact this physical...

To my thinking the potentially bigger impact this physical exchange has will not be so much on price but one of physical gold flow from Western markets to the SGE market.

If I'm not mistaken if there is a premium on the SGE over Comex traders will buy contracts on Comex and take delivery of the gold so they can sell it on the SGE (because the SGE is a physical market and requires gold to be deposited before sold).

And given that Comex doesn't require the same deposit of physical gold to trade if there is a premium on Comex the gold can be sold on the market and the physical bought on SGE without needing to move the gold back to deposit in the Comex market.

So in this sense the SGE may take over as being the "real" price setter, but that doesn't necessarily make any difference to the gold price rather just that the gold will flow to the SGE over time.

Is my understanding correct?