Market insights and analysis

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

1st Quarter | 2022

Market insights and analysis


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

Gold prices resumed their upward move last week, keeping the 50-day moving average above the 200-day moving average. The metal closed the week at $1,817.20 per ounce.

This surge was fueled by Federal Reserve Chairman Jerome Powell’s remarks on Thursday that the U.S. job market still had “some ground to cover” before the Fed would consider removing support for the economy by hiking rates.

According to Reuters, David Meger, director of metals trading at High Ridge Futures, said, “You’re going to see inflation heat up moving forward because the Fed is more focused on employment and is not going to fight them in the near-term and that is a positive environment for precious metals. … This is not a flash-in-the-pan type rally but a more sustainable one because nothing is standing in gold’s way.”

It seems that the Federal Reserve is going to keep making excuses not to react to rising inflation numbers because it has no intention of raising interest rates. These actions—first calling the rising inflation “transitory” and then not focusing on fast-rising prices but rather employment numbers for actionable signals—indicate the Fed is likely going to let this go as far as it can until the end of next year.

This insight can help investors position their portfolios for the predictable results by fortifying their holdings with increased allocations to inflation-fighting gold.

Rick Andrews is president of Avant Capital Management.

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