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.

Gold prices started the new year by hitting $1,900 per ounce and closed the week at $1,889.10 per ounce. Prices remained above the 50-day moving average (see the following chart).

A new strain of the COVID-19 virus has popped up. So far, it appears to be more contagious but not more lethal. Depending on how effective the vaccines are against this new strain, this development may complicate how soon the U.S. economy begins its hoped-for recovery.

Adding to expectations of increased inflation resulting from the massive amount of stimulus dollars being pumped into the economy, government fiscal and monetary policies remain dovish, holding interest rates down. This provides for continued negative interest rates, which make gold a preferable asset class to bonds. This may help support the continuation of the current gold bull market in the coming year.

As financial research firm InvestorPlace reports, “Negative interest rates are providing additional fuel for a great, big gold rally. … At a recent glance, an all-time record $17.9 trillion in global debt is priced to yield less than nothing, up from less than $8 trillion in March. Interestingly, $17.9 trillion is almost exactly the current value of all the gold in the entire world.”

Rick Andrews is president of Avant Capital Management.



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