The Strong Australian Dollar and the Gold Price (Podcast)

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The gold price is rising in U.S. dollars. But close observers will note it hasn’t done much in Australian dollars. The chart below shows that the strong Aussie dollar has effectively capped gold’s appreciation in local currency terms.

Gold Price

What gives?

To explore that question—and other gold related investment matters—I called up a former London desk mate, Adrian Ash. Adrian is currently the head of gold research at BullionVault.com and a frequent contributor to the Daily Reckoning.

Adrian notes that commodity currencies like the Australian and Canadian dollars have rallied with gold. What does that mean for gold investors in those countries?

That’s a question we’ll look at in greater depth in the coming weeks here at the Daily Reckoning. In the meantime, you can listen to my full interview with Adrian at the link below. In our conversation we discuss Goldman Sachs (NYSE: GS), Northern Rock (LON: NRK), the U.S. dollar, bullion vs. shares, and barbarism.

Enjoy.

Gold Price and the Strong Australian Dollar

Dan Denning
The Daily Reckoning Australia 
 

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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6 Comments on "The Strong Australian Dollar and the Gold Price (Podcast)"

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Ann Donohue
Guest

OK gold not the way to go it can only appreciate or go in reverce!
Maybe we should look to oil maybe INP is the next small cap explosion?

Alan
Guest

The Australian dollar is vulnerable in the long term,think drought,debt,and deficit.Moderating global growth,new mines on line,high energy and labour costs, and anti-chinese sentiment(not to mention a burgeoning sino bubble)do not bode well for the future.The Aussie will dislocate from gold.Then its really just about gold…..a question of faith.

kage
Guest
Dan, Terrible audio quality, with premature ending. Adrian, Not so close to microphone, and SLOW DOWN. Alan, Yes, the Aussie is doomed. If global markets are really going to price risk (as they are currently with the USD), then one of the benchmarks to assess currencies will be Debt/GDP ratio. The US is of course the front runner for this ratio. Then there is considerable daylight, then Spain, then Australia in third place. Spain is somewhat insulated via the Euro and EEC, but the Aussie is all by itself, and a favoured carry trade target. One day the rug will… Read more »
Alan
Guest

Thanks for the support kage.I was starting to feel lonely.As for sino pop,yes a great new brand.The bottles are being prepared, ready for launch on the submerging markets.

kojacq
Guest
Nice insights/predictions Alan & Kage… although, one never knows exactly how the future will play out, until it happens, whenever it’s going to happen?? However, the odds are reasonably favourable for what you guys are predicting… provided all the sequence of events falls the way you are expecting it to. One further thing to add regarding the Deficit/GDP ratio you speak of, is that along with Australia being in Third place on this illustrious list, according to the recent World Gold Council report, the RBA is also rather low on their list of the percentages that central banks around the… Read more »
First Home Buyer
Guest

Deja Vu. :/

Help! I have absolutely no idea how to deal with this scenario. Downloading the podcast to see if it has any answers

When XAUUSD rises, AUDUSD falls proportionately.

wpDiscuz
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