China may be playing down its extreme gold demand but once again reports show that China is far from done with its efforts to buy gold in lieu of other assets for its reserves.You probably won't hear about it in the press as this latest move is a bit more clandestine than an outright purchase on the open market. According to a Reuters report today, China is about to close a deal with Hugo Chavez to obtain proper permits to begin mining for gold in Venezuela.Canadian mining company, Crystallex, previous owner of mining rights, has been trying to work with the venezuelan government to obtain proper permits to extract some 17 million ounces of gold. So far, every effort to obtain proper permits has been shut down by Chavez, costing the company more than $300 million in non-cash write-downs. Enter China! For whatever reason, likely a pile of money thrown at it by the Chinese government, it appears work can begin to extract a new supply of the yellow metal. The new company will be owned two-thirds by China and one-third by Crystallex. How will this affect gold supply and demand fundamentals? Don't worry, very little if any of this gold will be made available for sale to the general global population. China wants it all. This is just one more example of China's unstoppable effort to procure the world's gold supply.