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.

After the tragic deaths of 13 United States service members last week in Afghanistan, gold prices surged above both the 50-day and 200-day moving averages, closing the week at $1,819.50 per ounce.

The state of the U.S. dollar may affect the demand for gold down the line, at least according to DoubleLine Capital Founder and CEO, Jeffrey Gundlach. Gundlach told Yahoo Finance that he believes the dollar’s status as a reserve currency could be in danger and that “ultimately gold is going to go a lot higher.”

The strength of the U.S. dollar versus gold is enhanced by its position as the world’s reserve currency. The dollar has held this status because of (1) the fiscal and monetary policies of the U.S protecting the value of the dollar, (2) the strength of the U.S. economy, and (3) the strength of the U.S. military.

All three of these factors are now in question due to (1) the Federal Reserve’s continued policy of zero to negative interest rates coupled with heavy deficit spending by Congress, (2) the devastating effect of the COVID pandemic on the U.S. economy (Gundlach notes that some economists project that China’s economy will surpass the U.S. by 2028), and (3) the Chinese/Russian dominance of the Eurasian landmass.

Gundlach said, “… As long as we continue to run these policies, and we’re running them more and more aggressively, we’re not pulling back on them in any way, we are looking at a road map that is clearly headed towards the U.S. losing its sole reserve currency status.”

Rick Andrews is president of Avant Capital Management.

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