Chinese economy and renminbi hammer gold prices?

Maybe gold's decline is due to the weakening Chinese economy and yuan. The last time the Chinese currency stopped appreciating was in 2008, during the global financial crisis. Gold peaked earlier in the year (just after the Bear Stearns bankruptcy) and Hugh Hendry showed the RMB/Oil correlation. This time, with heavy trading in gold, it may be the commodity that signals global weakness.

In Yuan revaluation will be inflationary for the world and Yuan and Oil—The Bubble Connection? I showed a chart of Hendry's comparison with oil. I have written that gold is the new commodity of choice for the Chinese. Where they were stockpiling oil ahead of the 2008 Olympics, they have been buying up gold since 2009 and accelerating their purchases in 2012, just as they accelerated into 2008. The Chinese are saying their currency is near fair value now, which would lead to an end in appreciation, just as we saw in 2008 and which coincided with the end of the oil rally. Here, I think we can look back to autumn 2011 and the weakening of the Chinese property market, the December trading declines in the renminbi and the recent fall in the yuan and comments from senior leadership, that the yuan is done appreciating for now and the economy is in serious trouble. All of which is bad news for gold.

Update: I found some previous posts to give you an idea of why I think the renminbi matters to gold. From 2010, Maybe this time it should be yuan and gold...
. Oil shot up during the last revaluation because China was building petroleum reserves and energy was a big investment theme. What do Chinese want to buy today? Yes, they still need oil and natural resources, but to my mind, what's more popular (besides real estate, which should also appreciate) is gold.

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