By creating a gold exchange based on physical delivery, China aims to become the global price-setter for gold. This establishes a parallel financial system, allowing international trade to be settled in yuan anchored to gold and directly challenging the dollar's dominance.

Despite the absence of a real surplus, oil prices are unlikely to surge. China has built massive strategic reserves and consistently sells from them when Brent crude moves above $70 per barrel. This acts as a ceiling on the market, creating a range-bound environment for prices in the $60s.

A confluence of factors, including rising AI-driven component costs and higher oil prices, will likely flip China from a deflationary to an inflationary force on the world economy. This shift will particularly squeeze European nations, which may be forced to raise interest rates, thereby increasing their debt service costs.

The US freezing Russian assets and cutting SWIFT access during the Ukraine war demonstrated the risks of relying on the dollar. This prompted countries like China to accelerate their diversification into gold, viewing it as a geopolitically neutral asset to reduce their vulnerability to US foreign policy and sanctions.

China is engaging in economic warfare by systematically reducing its holdings of US debt. This strategy targets the foundation of the US economy, which is 70% based on debt-fueled spending. By simultaneously pushing a gold-backed digital yuan, China aims to undermine the dollar's reserve status.

Beyond strategic ports, China's maneuvering includes creating financial infrastructure, like a South American gold corridor, as part of a larger strategy to establish a gold-backed currency that could rival and undermine the US dollar's status as the world's reserve currency.

Analyst Doomberg theorizes that the mystery of low oil prices amid Mideast conflict is due to China. Last year, China likely bought enormous amounts of sanctioned oil, lied about its reserve levels, and is now discreetly selling it into the market to keep prices stable and increase its geopolitical leverage.

Unlike Western economies facing severe inflationary threats from the Iran oil crisis, China is in a better position. A slight rise in inflation could actually be beneficial for its economy, helping to counteract recent deflationary pressures without alarming its central bank, the PBOC.

China is capitalizing on geopolitical instability from the Iran conflict to advance its de-dollarization agenda. It is increasing the use of the yuan (CNY) in trade settlements with Middle Eastern partners, chipping away at the US dollar's long-held dominance in international finance and energy markets.