UBS: A Stronger Yuan Will Supercharge Chinese Buying Demand For Gold

china gold bar

The vast majority of analysts these days expect some sort of yuan revaluation this year, with many thinking it could come by the end fo June.

UBS points out two reasons why a yuan revaluation would be great news for Chinese gold-buying demand:


“First and foremost gold will become cheaper in yuan terms and this should stoke additional interest in the yellow metal,” Edel Tully, London-based analyst of the bank, wrote in a report. “And if the yuan revaluation is interpreted as a signal of government confirmation that inflation is indeed a problem, this would likely boost gold’s appeal.”

Chinese gold demand doubled over the last 10 years. Bulls will say that reasons such as the above are why it can double again over the next 10.

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