China is pulling the plug on paper gold trading for regular savers, a move that could push real gold prices higher and chip away at the dollar's power.

• China's biggest banks are switching off retail paper gold trading on July 24th, and jacking up collateral rules to record highs.
• The official reason is protecting people from wild price swings, but the real goal looks like ending speculation so gold's true price can show.
• Central banks worldwide are quietly buying record amounts of physical gold while selling US government bonds, signaling they no longer trust the dollar.
• China is building its own gold settlement hub in Shanghai and Hong Kong to set the price itself, tying its currency to gold instead of the dollar.
• The US could fight back by revaluing its own gold (still officially priced at $42 an ounce) or launching gold-backed bonds, possibly around July 4th.

Outlook: Expect more central-bank gold buying and a slow move away from the dollar, with gold likely to rise — or the dollar to fall — as China's new system goes live.