Bruce, there is no technical reason for the Chinese Central authorities holding US dollars in their mammoth reserves-they would be allowed to switch to any other currency if they so chose.
They obviously use the US$ credits for barter, not for investment.
IMO of the opinion that the yuan will be let loose on a very gradual fashion-will not upset the world economies with rapid change. It has a number of priorities-power shortages, massive population movements from land to city, rumours of skill shortages would you believe, and high on the list is a banking system that is insolvent!!!
If a gradual movement, no gold impact in my opinion.
Think problems with the US economy will come home to roost in the second half, that should put a bit of fuel in gold's afterburners/coupled with recognition of a significant global downtrend in gold production(Sth Africa, Australia, and Nth America) with demand constant or increasing marginally.
Have no personal direct exposure to gold in the short term.
