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Created, September 1, 2017.
China sees new financial world order with oil benchmark backed by gold. China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry. China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong.
China has long wanted to reduce the dominance of the U.S. dollar in the commodities markets. Yuan-denominated gold futures have been traded on the Shanghai Gold Exchange since April 2016, and the exchange is planning to launch the product in Budapest later this year. Saudi oil could shift from dollars to yuans. In 2003 Saddam dumped oil dollars to euros. In 2011 Gaddafi was going to create dinar back by gold.
Source: Nikkei Asian Review