Merryn Talks Money – Markets Weekly: Gold’s Moves, Yen Intervention, and Fallout From a Weaker Dollar
Date: January 30, 2026
Host: John Stepek (standing in for Merryn Somerset Webb)
Guest: Marcus Ashworth (Bloomberg Opinion columnist, European market expert)
Episode Overview
This week's episode delivers a timely and incisive analysis of several major global market moves:
- The surprising surge in gold prices above $5,400 an ounce
- Shifts in the US dollar and the broader implications of a weaker greenback
- Central bank behavior, investor strategies, and asset allocation
- Japan’s yen intervention and the ongoing “currency wars”
- Economic concerns in major European economies, particularly France
The conversation is dense with practical wisdom for anyone interested in markets, portfolio construction, and the macro factors driving asset performance.
Key Discussion Points & Insights
1. Gold’s Meteoric Rise
Timestamps: 01:20–04:12
- Gold has shot past $5,400/$5,500 per ounce—well above most 2026 year-end forecasts.
- Central Bank Buying: While Chinese, Russian, and Polish central banks have been buyers, recent gains are not directly tied to heavy buying but appear more speculative.
- ETF & Retail Flows: ETFs, typically bellwethers for investor sentiment, have been net sellers; retail interest is limited.
- Speculation & Sticker Shock: The rally looks like “catch-up” from investors who missed prior gains. But Marcus expresses concern about “sticker shock” at these levels.
- Quote:
“Calling the top is a fool's game—fool's gold even—and really I can't explain it other than the fact that lots of people seem to think it's about dollar debasement, which it isn't.”
– Marcus Ashworth (03:00) - Silver vs. Gold: Silver's price action is partly driven by a minor physical shortage; jewelry demand for gold has fallen as prices rise.
2. The US Dollar Debate: Debasement or Overvaluation?
Timestamps: 04:12–08:06
- Not Dollar Debasement: Both John and Marcus dismiss the idea that gold’s surge is about a weak dollar. The dollar remains historically strong.
- Quote:
“It's not yet. It's historically still relatively expensive. The dollar has been much, much lower than this in the last 20 odd years.”
– John Stepek (04:12)
- Quote:
- Currency Hedging: The long-standing global trade—owning US stocks unhedged—may be at an inflection point as US exceptionalism narrative fades.
- Distinguishing Risks: Marcus splits “owning US assets” from “being naked long USD currency exposure”:
- “Do you want to own the double bet, which is owners? And if you're a foreign investor, being naked long dollar outright, probably not anymore.” (05:25)
- Emerging Markets: Non-US markets are more attractive for new allocation, but US stocks and bonds remain fundamentally strong.
3. Portfolio Reconfiguration & Asset Allocation
Timestamps: 08:06–10:08
- Asset Allocators React: As charts (e.g., 200-month moving average on EUR/USD) signal a possible trend reversal, asset allocation teams are rethinking concentration in US assets and the dollar.
- Quote:
“If you haven't been holding gold at all, you're probably starting to feel a bit of an umpty.”
– John Stepek (09:18)
- Quote:
- The 60/40 Portfolio: Gold’s strong historical numbers now make mixed-asset allocations (e.g., “60/35/5” including gold) look more defensible, but Marcus is skeptical of piling in at these highs.
4. Euro vs. Dollar: ECB Policy and European Economic Woes
Timestamps: 10:08–14:23
- Euro Strength & ECB: Every time Euro threatens to rise above 1.20–1.25 vs. the dollar, the ECB acts to suppress it—expect drama around the next ECB meeting (February 5).
- Quote:
“They come and hit it on the head with a hammer. I expect that's exactly what's going to happen.”
– Marcus Ashworth (10:56)
- Quote:
- Rate Cuts Likely: If the Fed and Bank of England cut, Europe will likely follow suit, lest a strong Euro hurt already weak exports and economic growth.
- France's Low Inflation: Unusually low inflation in France (~1%) reflects deeper economic malaise, not just “base effects.”
- Quote:
“It's quite extraordinary how long it's been under 1%…there is some actual residual problems perhaps with lack of economic growth and stimulus and momentum.”
– Marcus Ashworth (14:31)
- Quote:
5. Japan’s Yen, Carry Trades, & US Pressure
Timestamps: 16:16–19:55
- Japanese Economy/Inflation: Despite massive government debt, Japan’s domestic economy and inflation are stable.
- Yen Carry Trade: The real global impact of the carry trade (borrowing yen to buy other assets) is more nuanced; foreign investors, especially hedge funds, have faced losses as Japan tightens—domestic buyers remain cool to longer-duration JGBs even amid rising yields.
- Quote:
“They are keener to stay out of Japan and they believe that the US will be cutting interest rates. Why not own that bond market?”
– Marcus Ashworth (17:29)
- Quote:
- Yen Intervention:
- The US Treasury quietly signaled a warning to Japan about further yen weakening, triggering a temporary reversal.
- If real intervention comes, it could dramatically move markets.
- Quote:
“A line in the sand's been drawn. Is that going to hold? Probably not. But at some point the crashing waves will come in.”
– Marcus Ashworth (18:57)
- US Policy: The US doesn't want the yen (and thus the dollar) to get too strong, as it would hurt US exports. The US is keeping a close eye on Asian currency management.
Memorable Moments & Quotes
- On Calling Market Tops:
“Calling the top is a fool's game—fool's gold even.”
– Marcus Ashworth (03:00) - On Portfolio Allocation:
“If you haven't been holding gold at all, you're probably starting to feel a bit of an umpty.”
– John Stepek (09:18) - On ECB and the Euro:
“Every time it pokes its head above 120 and certainly gets close to 125, they come and hit it on the head with a hammer.”
– Marcus Ashworth (10:56) - On French Inflation:
“It's quite extraordinary how long it's been under 1%…there is some actual residual problems perhaps with lack of economic growth and stimulus and momentum.”
– Marcus Ashworth (14:31) - On Yen Intervention:
“A line in the sand's been drawn. Is that going to hold? Probably not. But at some point the crashing waves will come in.”
– Marcus Ashworth (18:57)
Important Timestamps
- 01:20–04:12: Gold’s rise and the real drivers behind it
- 04:12–08:06: The dollar’s decline, asset allocation rethink, US asset value
- 08:06–10:08: Charting currency moves, portfolio construction, gold’s new status
- 10:08–14:23: Euro-dollar dynamics, ECB response, French inflation issues
- 16:16–19:55: Japanese yen’s slide, intervention signals, US strategy
Tone and Style Notes
The episode is relaxed but densely packed with pragmatic, unvarnished financial wisdom. Both speakers take a skeptical, level-headed approach to potential “fad” investment behaviors (buying gold after the run-up, chasing euro/dollar trends) and urge listeners to trust basic risk-reward logic over herd or chart-based decision-making.
Summary
This week’s Markets Weekly offers a sharp, timely look at why gold and other precious metals have surged, why the US dollar’s so-called “debasement” is a misread, how global investors are rethinking risk, and why central banks—especially the ECB and Bank of Japan—are being forced into defensive action as currency moves threaten economic stability. For listeners seeking decision-ready insights rather than hype, this episode is rich, skeptical, and highly actionable.