Gold backed Yuan will dilute USD Petrodollar.

For gold traders. We are in a new world as of this week. China is the world’s biggest oil importer. As Trump threatens China’s trade with the US China enters a new contract to pay for oil with a gold backed Yuan. This will circumvent the use of the USD (the petrodollar since 1973) from an oil delivery from say Russia. What is the likely impact on the USD and Gold? An inverse price reaction. The USD will likely weaken (this week hit .91) and gold will continue to increase. It is also interesting to note that the .91 level reached this weekly has broken a monthly fib support for the USD index.

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