Market insights and analysis

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

3rd 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.

After testing lows hit during the end of last year, gold prices rebounded last week to trade around the 200-day moving average, which is currently around $1,500 per ounce. Prices closed the week at $1,484.60 per ounce.

A factor in the two-week decline in gold prices is gold’s relatively superior performance compared to other asset classes, specifically the S&P 500 (see the following chart). This makes gold a good choice to sell to offset losses from other holdings.

Recent remarks from the World Gold Council support this. In its latest Investment Update report, the Council said the following:

“Gold has … likely been used to raise cash to cover losses in other asset classes because:

  • it remains one of the best performing asset classes year-to-date (y-t-d), despite recent fluctuations
  • it is a high quality and highly liquid asset, trading over US$260 billion (bn) per day in March …

“Looking ahead, we believe the deceleration in economic growth will undoubtedly impact gold consumer demand and gold’s volatility may remain high, but high risk levels combined with widespread negative real rates and quantitative easing will be supportive of gold investment demand as a safe haven.”

Rick Andrews is president of Avant Capital Management



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