Market insights and analysis

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

1st Quarter | 2022

Market insights and analysis

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

The price of gold surged 1.9% on Friday (February 11), hitting a three-month high, and then closed the week at $1,842.10 per ounce.

The catalyst for this move was word from the U.S. government on Friday that a Russian invasion of Ukraine was imminent. All major market indexes fell dramatically.

Such an event presents two significant dangers: 1. The geopolitical risk of a shooting war in Europe that could devolve into a conflict between the U.S. and Russia. 2. The inflation risk. Such a conflict could drive oil prices up even more. Currently, they are up 22% year to date.

Peter Schiff, economist and global strategist at Euro Pacific Capital, pointed out in his podcast that bitcoin’s reaction to the news about Ukraine shows it’s far from a safe haven and that, when the chips were down, bitcoin was no “digital gold.” The bitcoin ETF was down 4.5% on Friday, which is evidence that it has no store of value during global conflicts and no resistance to inflation dangers.

Historically, gold has shown it has “safe haven” qualities and can provide inflation protection for portfolios.

Rick Andrews is president of Avant Capital Management.



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