Guru watch: buy gold ahead of China's big currency move
China has steadily been building “a renminbi-based international payments system", says Charles Gave, founding partner and chairman of Gavekal.

China “wants to put gold back at the centre of the global payments system”, argues Charles Gave, chairman of investment research provider Gavekal. This is one of the driving forces behind its recent move to take control in Hong Kong.
Since 2005, the US has increasingly “weaponised” the dollar, using its position as the global reserve currency to exclude both nations and individuals from the global financial system. In response, China has steadily been building “a renminbi-based international payments system” based in Hong Kong and backed by its laws – thus the “new national security law” is partly driven by China’s goal of securing “national financial security”.
Sceptics argue “that the Chinese Communist Party will never open the country’s capital account” (allowing the free movement of renminbi around the globe). So, they claim, the idea that it will become an international currency and a challenger to the US dollar’s status remains remote. But there is a way around this – to make the renminbi exchangeable for gold, but “at a market price, rather than at a fixed price, as the US did after 1944”. After all, while “no one knows how much gold China owns,” it is the world’s biggest gold producer.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
So when might this happen? Most likely China will act only when the fiscal and monetary policies of Western countries have reached the end of the road and “visibly fail”. How should investors prepare? Among other things, buy physical gold, gold miners and commodity producers.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Investors should cheer the coming nuclear summer
The US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
8 of the best houses for sale with follies
The best houses for sale with follies in the grounds – from a five-storey Victorian Gothic tower in Tonbridge, Kent, to a former mill in Oxfordshire with gardens that include a folly on an island in a lake
-
Investors should cheer the coming nuclear summer
The US and UK have agreed a groundbreaking deal on nuclear power, and the sector is seeing a surge in interest from around the world. Here's how you can profit
-
8 of the best houses for sale with follies
The best houses for sale with follies in the grounds – from a five-storey Victorian Gothic tower in Tonbridge, Kent, to a former mill in Oxfordshire with gardens that include a folly on an island in a lake
-
A tale of two Reits – why performance matters for valuation
AEW UK and Regional are two Reits that are valued very differently, despite a shared focus on properties outside London
-
Healthcare stocks look cheap, but tread carefully
Shares in healthcare companies could get a shot in the arm if uncertainty over policy in the US wanes, but are they worth the risk?
-
The Palace of Westminster is falling down
The Palace of Westminster is in need of repair, but the bill is prohibitive, says Simon Wilson
-
'It’s time to buy British equities'
Opinion There is no better place to start investing in UK equities than with two of MoneyWeek’s favourite investment trusts, says Max King
-
Sotheby’s fishes for art collectors – will it succeed?
Sotheby’s is seeking to restore confidence in the market after landing Leonard Lauder's art collection, including Gustav Klimt's Portrait of Elisabeth Lederer
-
How to cash in on overlooked British bargains offering both income and growth
Opinion Sue Noffke, manager of the Schroder Income Growth Fund, selects three UK stocks where she’d put her money