Alix Steel Discusses Effect Of Stronger Renminbi On Gold

In an article webbed by TheStreet.com, Alix Steel starts off by discussing the possibility of gold rising as a result of renminbi appreciation. The last time it did so, gold did go up long-term. The reason for a repeat would be gold becoming cheaper in renminbi terms, leading to more demand ceteris paribus. Ir would help fill the "ownership gap" of gold in Chinese hands. (There's already a big push for maninland Chinese citizens to own more gold.)

On the other hand, a rising renminbi would make the PRC economy less competitive ceteris paribus. That's precisely why the U.S. government is pushing for an appreciation of the currency. Should declining competitiveness impact incomes, then demand for gold (whatever the price) would likely go down.

Both arguments are explained in her piece.