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.

Mild recession?

Last week, gold prices continued to consolidate around their 50-day moving average. The metal closed the week at $1,762.90 per ounce.

U.S. GDP has been negative for the last two quarters, meeting the accepted definition of a recession, but the drops haven’t been big in terms of numbers.

So, what kind of slowdown will we experience? A mild, shallow recession? Something more pronounced, keeping in mind that recessions historically last about 18 months on average?

A recent article from CNBC reports, “There may be no escape from recession.”

“The latest reports on housing and manufacturing, according to investor Peter Boockvar, suggest it’s rapidly spreading to other parts of the economy.

“‘People are not being sensitive enough to this economic slowdown and what it’s going to mean for corporate earnings and profit margins,’ the Bleakley Advisory Group chief investment officer told CNBC’s “Fast Money” on Monday [August 15].

“The National Association of Home Builders/Wells Fargo Housing Market Index dropped into negative territory in August. … Boockvar predicted a housing collapse almost exactly a year ago. … He warned the Federal Reserve was stoking another real estate price bubble that will wipe out home equity. … ‘If you look at previous rate hiking cycles, it was lower and lower levels of a Fed funds rate that started to break things. … So, now we start getting into dangerous territory where things are at risk of breaking.’”

Boockvar believes investors can still make money in this environment, recommending, among other investments, precious metals.

Now may be a good time for investors to consider adding gold to their investment portfolios.

Rick Andrews is president of Avant Capital Management.



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