Chinese own gold in Yuan their local currency. They have been speculating in gold hoping to sell later and get more Yuan for their investment.
But now that game is up as the Yuan is set to appreciate and it will be very hard to buy gold and overcome the stronger currency headwind.
While it is irrational for gold to fall in Yuan more than the yuan rallies against the dollar. THey will panic and all sell at once. The same way oil traders sell off crude at a beta of 2 or 3 times the actual move in the dollar when the dollar gets strong.