Market insights and analysis

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

2nd Quarter | 2022

Market insights and analysis


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

Gold prices bounced off the 200-day moving average after breaking through last week. The metal closed the week at $1,857.30 per ounce.

The Federal Reserve is hoping that inflation will ease by the end of the year as supply-chain problems begin to resolve. But this is only the U.S. side of the problem.

The Economist reports that China is experiencing problems that have not yet fully worked their way into the supply chain: “… China’s economy is in danger. The immediate issue is its zero-covid campaign, which has caused a slump and may condemn the economy to a stop-start pattern. That is compounding a bigger problem: President Xi Jinping’s ideological struggle to remake state capitalism. If it stays on this path China will grow more slowly and be less predictable, with big consequences for it and the world.

“After nearly two months the lockdown of Shanghai is easing, but China is far from being covid-free, with fresh outbreaks in Beijing and Tianjin. More than 200m people have been living under restrictions and the economy is reeling. … For the full year China may struggle to grow much faster than America for the first time since 1990. …”

Gold has historically been a hedge against persistent high inflation. As the chart above shows, gold prices have moved through their 200-day moving average and retested support as they retraced and turned back up. This classic formation may present a buying opportunity.

Rick Andrews is president of Avant Capital Management.

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