My guess is it will take Russia and China and the other BRICS nations most of 2018 to get all the nuances worked out and the gold trade settlement contracts will not actually come to the table until 2019 or possibly even 2020. We say this in light of what happened with the Shanghai Gold Exchange (SGE) bringing their gold settlement mechanism online back in April 2016. The SGE was suppose to bring this online in October 2015 but was unable to make it happen as they wished to avoid any major mishaps when launching. Anyone that has dealt with the launch of a new computer system or an ‘upgrade’ to a computer system understands there are usually massive problems to begin with as going from a virtual world to real world can sometimes be quiet different than originally anticipated.
We have been reluctantly reporting on the ‘gold backed oil contract’ supposedly coming out of China sometime in the future. We can say with 100% certainty there will be a yuan backed oil contract launched in the very near future, as that has been officially announced and an actual contract exist. The gold backed portion is still a little sketchy at this point as there has been no official announcement, no Chinese official discussing nor does any contract exist that is tied to the yuan backed oil contract.
What we just learned ‘First Deputy Chairman of Russia’s Central Bank Sergey Shvetsov said Friday’, Russia and China are discussing a ‘single (system of) gold trade both within BRICS and at the level of bilateral contacts,’
Is this the reason for the two recent attempts at beating gold down the line? Neither attempt, in my opinion, was very successful except in the very, very short term as both attempts were greeted with equal amount of contracts on the acquiring side of the trade. The gold bugs were waiting to pull the trigger on these smashes and as soon as the gold chart dropped it reversed and most of the ‘losses’ were regained within 48 hours or less.
This post was published at GoldSeek on Sunday, 26 November 2017.