Gold shines as dollar weakens amid US shutdown; commodities key hedge: Jonathan Schiessl

Global investors remain watchful as the ongoing US government shutdown shows little sign of resolution, but equity markets continue to demonstrate resilience. According to Jonathan Schiessl, Deputy CIO, Westminster Asset Management, both US political parties appear “intractable in their positions,” suggesting the shutdown could extend longer than expected.

However, Schiessl noted that the surprising part is how little the turmoil in Washington has impacted major US asset markets.

“Equity markets in the US still continue to grind higher despite all that’s going on within the government. Risky assets are not too concerned, but the currency and precious metals markets are certainly reacting,” he said in an interview with ET Now.

Dollar weakness boosting gold and precious metals

Schiessl highlighted that the dollar has been weakening amid the fiscal standoff, which has benefited commodities such as gold. The precious metal has been pushing to new all-time highs, with investors seeking safe-haven assets as political uncertainty lingers.

“The whole development remains dollar negative and is giving further impetus to precious metals and gold,” he said.

Meanwhile, long-term bond yields in the US have eased slightly, reflecting growing investor caution, even as equities stay buoyant.

India and Emerging Markets outlook

While short-term volatility may spill over into emerging markets like India, Schiessl believes the broader impact could be limited. “So far, we haven’t seen any risk aversion in equity markets that could significantly affect Indian equities,” he said, noting that the weaker dollar may even work in favor of emerging markets over the medium term.

Commodities and metals still attractive

Turning to portfolio strategy, Schiessl said that the commodities sector—particularly metals and mining—continues to look attractive, supported by the global dollar trend and inflation hedge demand.

“The metals, miners, and gold-related stocks have been performing extremely well globally. That’s an area we continue to deploy capital to,” he added.

He cautioned, however, that oil remains trickier due to supply-side risks and its sensitivity to geopolitical developments.

“Oil is more difficult to read at this stage, though it still serves as a partial hedge against geopolitical uncertainty,” Schiessl noted.

Value stocks still hold appeal

While global markets continue to be dominated by large US technology names, Schiessl sees opportunity in value-oriented segments such as commodities and industrials.

“The whole value side continues to look attractive, even though global markets are still being led by tech,” he said.

Despite political gridlock in Washington, the market’s ability to look past short-term disruptions highlights its confidence in long-term fundamentals. For Indian investors, maintaining exposure to metals, mining, and selective value stocks could be a prudent strategy amid global uncertainty and a softer dollar.