US$, Oil and effect on Gold

"China, Russia, Japan & France are working with oil producers in the Middle East to permit currencies other than the U.S. $ to be used to pay for oil. This basket of currencies will include the Japanese Yen, the Chinese Yuan, and the €. It is reported in leading U.K. newspapers that this payment may be in a 'new' currency that is made up of these currencies. It is also reported that a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar would form part of this 'basket' While we wait for confirmation from the countries involved, the news is in the market place and affecting gold strongly now. The most likely candidate for the 'new' money is the old Special Drawing Right of the International Monetary Fund. With the Chinese Yuan heading for one of the component parts of the Special Drawing Right in its next review by the I.M.F., the move would also incorporate the U.S. $, but break the link between oil and the $ a feature of the monetary world that has persisted for around 40 years now." -

Russia and Saudi Arabia have denied this news already and it is likely that if there is any truth to the story it will not be publicized this way. However, it remains expected by the market eventually and because of this the gold price is moving through overhead resistance! It is as if to say we expect it, so it is time to discount it now!

Once proved true and if true now, the era of uncertainty and monetary instability will be exacerbated by this break, taking the $'s prime support away from it and exposing it to the criteria that measures all other global currencies. This accounting will be bad for the $ and very, very positive for gold!