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The dollar’s fall to a four-month low and gold’s rise above $5,000 a troy ounce mark a decisive shift in the way global investors value political risk, says the CEO of financial advisory giant deVere Group.
Nigel Green’s comments come as the US dollar fell to a four-month low on Monday and gold rose above $5,000 a troy ounce for the first time, amid speculation about possible joint US-Japanese action to support the yen, adding further pressure on the dollar.
“Markets are reacting to speculation about a possible joint US-Japan currency intervention, growing fiscal uncertainty and geopolitical instability, triggering a rotation from the dollar to hard assets,” he explains.
“Investors vote with capital. Gold breaking $5,000 and dollar weakening simultaneously signal a reassessment of political and policy risk in the US. Markets now view political stability as a macro variable.”
The yen’s jump to around ¥153 per dollar, driven by expectations of coordinated intervention, adds to pressure on the dollar.
There are also legitimate concerns about a possible US government shutdown and recent geopolitical tensions as drivers of dollar weakness.
“The assumption that the dollar automatically strengthens during periods of uncertainty is being questioned,” notes Nigel Green
“Policy unpredictability, fiscal pressures and geopolitical shocks are forcing investors to diversify their reserves and portfolios away from dollar concentration.”
Gold’s rally reflects demand for assets outside political systems. Unlike currencies and government bonds, gold carries no counterparty or budget risk, making it a preferred hedge when investors question the credibility of policies.
“Gold is moving from a tail risk hedge to a core macro asset. Central banks have accumulated gold at record levels and retail investors are following suit.
“This is part of a broader transition to a multipolar reserve framework.”
Speculation that Washington might tolerate or encourage a weaker dollar to support exports and industrial policy adds a new dimension to currency markets. Government intervention in the currency markets would mark a shift towards more explicit currency management among major economies.
“When policy signals point to a weaker dollar, volatility increases across currencies, commodities and equities,” says deVere CEO.
“Currency policy is becoming an extension of industrial strategy, and investors are adjusting their portfolios accordingly.”
The broader trend is a gradual shift from the unipolarity of the dollar to a more diversified global reserve system. Trade settlement in local currencies, gold accumulation by central banks and increased regional financial arrangements all point to a multipolar currency environment.
“The dollar remains dominant, but its dominance is more contested and more politicized,” says Nigel Green.
“Investors hedge against concentration risks in the global, multipolar monetary system.”
The consequences for the markets are far-reaching. A structurally weaker dollar could support commodities and emerging markets, while increasing volatility in currency and fixed income markets.
Stocks related to defense, energy infrastructure, AI and technology supply chains, and industrial policy themes could see continued investor interest as governments overhaul economic strategy.
“The next decade will reward portfolios built on fragmentation. Geopolitics is no longer a background factor. It is a primary driver of asset allocation.”
He concludes: “Markets indicate that political credibility comes at a price.
“$5,000 gold and a plunging dollar reflect a revaluation of risk, and smart investors are positioning themselves for a world where monetary dominance is shared rather than assumed.”
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