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The Evelyn Partners Investment Podcast: interest rates and the gold price

In May’s episode of the Evelyn Partners Investment Podcast Cherry Reynard and Daniel Casali look at the rising gold price and why that might mean an end to the Federal Reserve’s interest rate hiking cycle. Inflationary pressures finally appear to be reversing, except for the UK where price rises are stubbornly high. They also look at the declining Dollar, why it may persist and who might benefit as it slips. Finally, they look at the recent earnings data, which was better than many expected.

Published on 03 May 2023Last updated on 03 May 20232 minute read

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Episode overview

The gold price has been rising, reaching a record high at over $2,000 per ounce in April. This suggests markets see an imminent end to the rate rising cycle in the US and further falls in the Dollar. Buying from foreign central banks is also driving the gold price higher, as countries seek to diversify their asset bases away from Western government bonds.

Markets believe inflationary pressures are ebbing. In the US, March’s CPI data showed the level of inflation at a two year low, while lead indicators such as falling job openings and lower selling prices show core inflation starting to come down. The exception is the UK, where inflation remains stubbornly high.

The Dollar has been weakening in response to an expectation of slower rate rises from the Federal Reserve. This may continue as other countries, such as the Eurozone, continue to raise rates. Foreign exchange traders may also pay attention to the growing deficit in the US, which increasingly requires foreign capital to support it.

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