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.

Last week, gold bounced back after a down week, reaching $2,000 per ounce before closing at $1,947 per ounce (see the following chart).

This consolidation around $1,950 per ounce presents a possible buying opportunity in the current gold bull market. All of the long-term factors that drove gold to all-time highs are still in place, including a weakening U.S. dollar.

In an article for MarketWatch, Vitaliy Katsenelson, CEO and chief investment officer at Investment Management Associates, explains why he thinks the dollar will continue to decline:

“In 2000, U.S. debt was $6 trillion—a 30% debt to GDP ratio. It was $14 trillion in 2010 and $23 trillion in 2019, increasing $1 trillion a year while the U.S. economy was booming. …

“By 2019, 10 years after the Great Financial Crisis, the Fed was still running its policy of quantitative easing. Debt to GDP at that time topped 100%—eclipsing the EU’s ratio of 86%. …

“The U.S. has spent 12% of GDP (so far) to keep its economy afloat during the shutdown—twice as much in terms of GDP as the rest of the world. …

“Consequently, credit rating agencies have put AAA-rated U.S. government debt on ‘negative watch,’ signaling a possible downgrade.”

Rick Andrews is president of Avant Capital Management.



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