- Investors are driving gold prices to all-time highs as they seek a safe haven from a falling dollar and the coronavirus
- Fintech advances are already making it possible to save and spend physical gold on a card
THE BIGGER THEY ARE, THE HARDER THEY FALL
I was having a beer the other week with an esteemed former colleague and superb commodities commentator, Tom Holland, who was saying that he kept hearing from people thinking the US dollar would “crash”, and that he thought they might be right.
For the past four years at least, currency analysts and commentators were saying the US dollar was too strong and would correct. The same would go for the Hong Kong dollar, with the Hong Kong Monetary Authority’s peg in place. And indeed, if you compare it with the sterling or the euro, the US dollar is strong. But, as Tom pointed out, what would it crash against? Sterling? Unlikely, with the British economy in its present state. The euro? No, for the same reason. The Japanese yen? Also unlikely, as it seems to reliably trade in a ¥105-¥110 range against the dollar – and even if it did, would anyone but the Americans care? Probably not. The more likely case would be for the dollar to generally decline against all the major currencies, and of course take the Hong Kong dollar with it. I suggested to Tom that a sharp dollar decline may already have occurred, but that it happened against gold.