Fed and ECB policies diverge – can the system handle a shock from a highly valued US dollar?


In this episode of The Pod of Gold, Nick Frappell and Shae Russell discuss the impact dollar strength is having on gold and the increasing yield gap between the US dollar and major currencies. Finally, we ask, is there scope in the system for a shock from a highly valued US dollar? 


Nick Frappell

Global Head of Institutional Markets

Shae Russell


Time Stamps:

  • 41 – Gold longs aren’t strong, but shorts aren’t convinced
  • 3:35 – Point n Figure suggested in April gold would fall to US$1,738
  • 6:40 – Gold looked like an outlier compared to inflation linked bonds
  • 8:22 – Divergent central bank polices increase the yield gap
  • 12:06 – Silver moves with copper but retail demand for silver is strong
  • 17:49 – Fed aim to suppress inflation
  • 18:61 – Lower growth environment likely to be supportive for gold
  • 20:11 – Expectations for a recession have sharply increased
  • 23:26 – Option strikes may push gold to US$1,700
  • 24:12 – Euro and US dollar at parity, temporary or a the new normal?
  • 27:45 – RBA risk significant pain if they lift rates too high
  • 31:49 – Aussie dollar falling as export slow, likely to go lower
  • 32:29 – Key takeaway

Click here to listen now.