TOKYO - Long-time gold bulls owe Jerome Powell a debt of gratitude as the easiest credit policies ever to pour out of Federal Reserve headquarters send the yellow metal into the stratosphere.

Gold’s surge to record highs, though, has Asian central banks thinking about actual debt, and the idea of gratitude has no role in this collective brainstorming. The jump in gold to about US$2,000 per ounce, and corresponding resurrection of Bitcoin values, is not about inflation, but rather waning trust in the US dollar.

That waning trust may be good news for America’s number one competitor China – where hints of an upcoming gold-renminbi exchange standard could provide traders, markets and banks with a compelling new currency: an international gold-underwritten yuan.

Markets don’t tend to move in straight lines, of course. The rally took a breather on Wednesday, with gold posting its biggest drop in seven years. That’s partly a reaction to a slight upward bump in US producer price inflation, and partly investors locking in their winnings.

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