Market insights and analysis

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

1st Quarter | 2022

Market insights and analysis


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

Omicron strikes

Gold prices stayed above their 50-day and 200-day moving averages, closing the week at $1,811.70 per ounce.

CNN reports that the outlook for the American economy has suddenly grown much darker. “Global markets are pricing in … greater growth concerns on the back of the weekend's Omicron-related news,” Mohamed El-Erian, chief economic adviser at Allianz, said Monday (12/20).

U.S. analysts look at Europe for an Omicron preview, as countries like the Netherlands begin  strict lockdowns. “Even if booster shots are effective at reducing the medical risks, a rapid spread of Omicron could still overburden health systems and force countries to follow the Netherlands and adopt more economically damaging restrictions,” said Berenberg chief economist Holger Schmieding. He predicts that if that happens, the eurozone and the United Kingdom could both see their economies shrink by 1% in the first quarter of 2022, compared with the final three months of this year.

“Germany, the region's biggest economy, is already teetering on the brink of recession. The United States may only be a few days or weeks behind Europe. …The fast-spreading variant threatens to add pressure to already stretched supply chains and exacerbate inflation,” reports CNN.

Now still may be an opportune time to take advantage of gold’s price consolidation, and strengthen investment portfolios with a larger gold allocation against these coming threats.

Rick Andrews is president of Avant Capital Management.

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