So now we have seen the green light for the Yuan to become part of the SDR basket. Interesting enough the US dollar and Japanese yen together still have a 50.1% share in the total basket, which must have a reason. But whatever the reason, I don't think this is going to stop the Chinese to go ahead with the internationalisation of the Yuan as a trading and investment currency.

Following agreements with the UK, Switzerland and Germany to establish European hubs for yuan denominated financial product development and yuan clearence even the US has now entered into the arena.

On November 30th the US suddenly moved towards setting up a group of institutions aiming at Yuan trading and clearing. Why so late and why in such reluctant wording? Probably because the US has been trying to stop the Yuan from entering the SDR until the very last moment, but did not succeed. I may be wrong, but it just seems so.

http://www.bloomberg.com/news/articles/2015-11-30/u-s-moves-toward-setting-up-yuan-trading-clearing-in-america

There have been a lot of developments concerning the involvement of China in the PM markets. Earlier this year the Bank of China became the first Chinese bank to be one of the direct participants in the LBMA gold auction. Then, on October 19th the Chinese Construction Bank joined the LMBA silver price setting mechanism.

http://uk.reuters.com/article/2015/10/19/uk-silver-price-ccb-idUKKCN0SD0ZH20151019

So that was only 2 weeks ago. At first instance, you can ask yourself how important the Chinese Construction Bank is as an international conduit. But that becomes clear when you read the following press release on (again) November 30th. The same bank is named as the official yuan clearing bank in Zurich, which I see as the major PM Hub of Europe.

http://thebricspost.com/china-construction-bank-named-zurichs-yuan-clearing-bank/#.Vl3XJ7mFN9A

Take my word, the inclusion of the Yuan in the SDR is not just a formality for the chinese authorities. It has been a green light for the Chinese to open up its capital markets and currency in the broadest way possible. I think we will see many more important steps in the near future, which have been in preparation for years and I still think that the launching of a Shanghai Gold fix in the coming weeks is one of them.

DCFM