Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

2nd Quarter | 2021

Market insights and analysis

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Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

Last week, positive news about the COVID-19 vaccines provided a temporary boost for the equities market. Gold prices responded by moving down to the 200-day moving average. The precious metal ended the week at $1,788.10 per ounce (see the following chart).

These optimistic reactions to a possible end of the stranglehold the virus has had on the U.S. economy tend to overlook what could happen in the long term. The massive stimulus measures being enacted now to fight the shutdowns and slowdowns could be setting up a real inflation problem down the road.

Last week, we noted that analysts at Goldman Sachs had come out with a $2,300-per-ounce price target for gold in 2021. According to CNBC, Citigroup believes gold could reach $2,500 in 2021, comparing the lineup of catalysts to that of gold’s 1970–1980 bull market.

GraniteShares CEO Will Rhind sees these catalysts remaining, despite the recent fall back in prices. He told CNBC, “The conditions that drove gold to an all-time high this year are very much still in place. I think it’s just natural that once you get to an all-time high in an asset class, there’s some consolidation afterwards and that’s what we’re seeing right now in terms of the price. … But the fundamental conditions are still here and I believe that they will be here for the next 12-15 months minimum as well.”

Rick Andrews is president of Avant Capital Management.



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