Plan To Trade Gold in Renminbi

The trading of gold in renminbi opens the door for arbitrage with dollar. This will allow the Chinese to continue attacking the dollar as "the reserve currency".

Headline: Gold demand to zoom in China in 2011

There are a lot of things in this world that I do not understand, and perhaps it is because of this persistent befuddlement that, for some mysterious reason, I think it is Highly, Highly Significant (HHS) that the Chinese Gold & Silver Exchange is planning "a first" – an international gold contract denominated in Renminbi, writes the Mogambo Guru from his lair in Tampa, Florida for The Daily Reckoning.

Agora Financial's 5-Minute Forecast notes that "Right now, the Hong Kong-based exchange settles all its trades in Hong Kong Dollars," which should be enough to get the job done, you would think. So why a new international gold contract denominated in Chinese Renminbi? I don't know, which is not unusual because I actually know so little about anything, but The 5 says, "Adding Renminbi to the mix could boost the exchange's trading volume by 20%, to a daily total of $6 billion," which I assume means that commissions, fees and money made by middlemen would increase, for one thing! Hahaha!

Source: commodityonline.com