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A Stronger Yuan Would Boost Gold Even More

By Don Dion

 About this article:
 Some investors have begun to speculate that China will allow its currency to appreciate, but they may not have considered gold as the asset that will get the most bang from a stronger Chinese buck. In the People's Bank of China's third-quarter report, the bank changed its language regarding the exchange rate; several analysts quoted by Reuters took it to mean that the government may allow the renminbi to appreciate. A stronger yuan would be bearish for the U.S. dollar. The only direct ETF on bet on a falling dollar, the PowerShares DB U.S. Dollar Bearish Fund , will go up, but with 57% of the underlying index invested in the euro, it isn't a direct bet on Chinese currency appreciation. While the WisdomTree Dreyfus Chinese Yuan might seem like the obvious ETF play in this case, more money can be made by figuring out what...

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