Movement in dollar is start of a secular change from structural overvaluation, says Ironsides' Knapp

Summary

Barry Knapp and Michael Gapen discuss the Fed, the dollar, and metals on The Exchange. Knapp argues the dollar is starting a secular decline from structural overvaluation and sees a strong case for gold due to China's shifting trade and reserve flows. Gapen says dollar weakness could be hedged more but is unlikely to be a major US inflation driver or necessarily disorderly because of the scale of dollar liabilities held abroad.

• The Fed meeting and rate-cut timing are discussed, with both guests reportedly forecasting two cuts but on different timelines.
• Barry Knapp says the dollar broke from the market-implied Fed policy path around Liberation Day and is beginning a secular decline.
• Knapp sees a strong case for gold as China diverts exports away from the US and puts money into gold.
• Knapp cautions that gold's parabolic move can become volatile and 'goofy.'
• Michael Gapen says the US trade channel is small, limiting the risk that dollar weakness drives a major inflation problem.
• Gapen highlights $62 trillion of dollar liabilities held abroad and says investors may need to hedge more.
• Gapen says the setup does not argue for a disorderly dollar move, but hedging demand could help fuel one.