Have some thoughts regards Chinese revaluation, it might make sense.
China has been buying up metals (using and also storing) to build up as a base of industrial productive wealth, an economic driver for the future.
But also has been buying gold chiefly from internal production and possibly with an eye to IMF sales. More importantly it has been urging it's citizens to buy gold also. I don't think the planners are silly, they see gold as a universal store of wealth in a reserve sense and in a national sense....Gold is the fall back, ie the backing. Make no mistake gold is not a relic to them but as in all of us in a deep belief sense, it is ingrained as an intrinsic measure of financial trust where all else fails. Gold is the fail safe storehouse.
A revaluation upwards would cheapen the Renminbi POG and with that urging to buy gold, for those having already bought their position would be weakened. I therefore see them perhaps pushing the POG higher so as not to disappoint those who already have bought if a revaluation occurs. They would need to continue to maintain that encouragement.
A possible scenario is for them to drive POG higher, then revalue......Their POG drops but not to the extent of disillusionment for their citizens, or to the point of discouragement.
Given that an upwards revaluation might also curb export demand and slow GDP growth, what it sees as perhaps currently necessary, their emphasis will be to protect themselves internally by continuing to buy and urging to buy gold.
I would not discount a possible launching of a gold backed renminbi. China has it's ever building reserves and the ever building reserves of it's people.....It now has the financial whip hand. Perhaps it is eying itself as custodians of the world's reserve currency.....
