A firmer yuan would suggest that the individual Chinese investor would hold their currency in preference to any other instrument, including gold, in the short term., ie dump gold and buy Yuan.
How would this effect other classes of gold investor? Probably not much in the short term. In the medium term you are driving up prices for finished goods as the Yuan strengthens-ie inflationary pressure. Good for gold. By this stage, Chinese investors would also be looking around for a different asset class to invest in-double whammy?
Net,net, net, no strong argument to hold gold in the short term?(ie next few months?).
The big danger IMO is letting the Yuan float totally, as this could kill world growth overnight. Perfect for gold as the panic would be enormous. Cannot see it happening-Chinese are control freaks and have been hinting at a gradual revaluation for nearly 12 months (ie preparing the market)..
