Market insights and analysis

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

2nd 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.

Last week, gold prices retraced back to previous support levels before turning back up on the daily chart. The metal closed the week at $1,911.70 per ounce.

Many economists were expecting the Q1 2022 gross domestic product report to show the U.S. economy had expanded by 1.1%. Instead, the report showed a shrinkage of 1.4%. This shocking 2.5% miss was the worst performance since spring 2020, during the initial COVID-19 recession.

The U.S. government greeted the news with the same dismissive attitude as they originally showed about inflation, characterizing the contraction as “temporary.” However, a report like this for the second quarter would make it official that we are indeed in a recession.

Harvard University professor Kenneth Rogoff, a former chief economist at the International Monetary Fund, told Fox Business that he sees a “perfect storm” for a global recession forming in three areas: 1. China’s handling of its new COVID lockdown measures has failed, already bringing it into recession. 2. The War in Ukraine and the economic sanctions involved are producing double-digit inflation in Europe and a lowering of living standards there. 3. The U.S. central bank is facing a difficult decision of whether to continue raising interest rates to fight inflation while running the real risk of driving the economy into recession.

Historically, gold has provided a safe haven during these global recession “storms.”

Rick Andrews is president of Avant Capital Management.

 



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