The dollar has just become significantly more valuable vs. the yuan and so has the value of China's dollar reserves. This gives China more buying power to buy gold using dollars.
One other point, and this is tied to China's ultimate goal: to unload its massive hoard of dollar reserves while making as little noise about it as possible. Last night, a few hours after the yuan dropped precipitously against the dollar, the US dollar index plunged in cliff-dive fashion, losing 36 basis points in about 30 minutes. While that may not sound significant, in currency trading terms that is considered to be a mini-crash. Oh, it also dropped below key 80 line of support that has been drawn in the sand by the U.S Government, slicing through that level with ease.
China doesn't need REAL cruise missiles to blow western US banks and by virtue the FED off the map.
Derivatives would be cost prohibitive to have priced for this type of a Yuan plunge.
Smacked right upside the head, those GS and JPM traders.
And there's a whole lot more coming from whence that came.
(and stock traders who continue relying near exclusively on charts and TA, are going to have some fun as well)
