Starting today China will give foreign investors the ability to invest in physically traded gold contracts denominated in Yuan. The Chinese have given investors assurances that the contract will be free from price manipulation and each contract will have a guarantee of physical delivery.

The Shanghai gold exchange will be located in the cities free trade zone and hopes to provide direct competition to the U.S. based Comex contract. The Chinese hope the new contract will eventually become the premier gold pricing mechanism.

Worryingly for the U.S. dollar more and more assets are being purchased without the need for dollars. Only a few months ago Russia and China sign a gas and oil deal which can be settled in either the yuan or ruble. Even the Chancellor of the Exchequer, George Osborne, recently said the yuan will more than likely become the world’s next reserve currency.