The antiquated 'gold standard' now appears to not be the only way to back one's currency with a precious metal as a new program instituted by the Shanghai Gold Exchange (SGE) will soon aid in the expansion and internationalization of the Chinese Yuan.
Just prior to the Christmas break, the SGE launched a new English language website that has the primary purpose of allowing foreigners to access products and purchase gold in RMB. And since the SGE is the world's largest physical gold market, this move has the two-fold effect of first allowing individuals to bypass London and the Comex if they have no interest in paper gold trading, and secondly to aid in the expansion and internationalization of the Yuan in global trade.
Last week the Shanghai Gold Exchange (SGE) launched a new English website to offer international customers more information and tools on trading gold in renminbi through its subsidiary in the Shanghai Free Trade Zone the Shanghai International Gold Exchange (SGEI). BullionStar took the opportunity to translate a speech by a Teng Wei, Deputy General Manager of the SGEI, named “How China’s Gold Market Can Help The RMB Achieve International Status” that was held at the Renminbi World summit in Beijing on the 29th and 30th of November 2016. In the speech Teng Wei outlined his vision for the SGEI going forward regarding renmibi (RMB) internationalization, connecting the onshore and offshore renminbi market and increasing gold market share. - Bullionstar via Zerohedge
Over the past 45 days the Shanghai Gold Exchange has begun to disconnect itself from the global price standard set twice a day in London and New York by adding premiums of between $30 - $50 to their designated 'fix price'. And by having a price spread of this magnitude so far above that of the Western paper gold markets, opening up a new portal for U.S. and European traders to buy gold, even in the Yuan currency, will lead to a massive increase in their market share of the global gold market and an ever expanding increase in transactions being done in the Chinese RMB.