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With inflation and geopolitics fueling volatility in investment markets, what opportunities should investors look for in the gold and precious metals sector? In this CEF Insights Podcast episode, Merk Investments’ Axel Merk, President and Chief investment officer, and Peter Maletis, Portfolio Manager, share views on the sector’s outlook and opportunities and impressions of the rise of digital assets.
Welcome to CEF Insights, your source for closed-end fund information and education, brought to you by the Closed-End Fund Association. Today, we are joined by Axel Merk, President and Chief Investment Officer, and Peter Maletis, Portfolio Manager for Merk Investments. Merk Investments is the investment advisor of ASA Gold and Precious Metals Limited, ticker ASA. We’re so glad you both can be with us.
Great to be with you.
Good to be with you as well.
Axel, since we last spoke in May, inflation has become a more significant issue. The Federal Reserve is expected to shift from its highly accommodative policy and geopolitical tensions are increasing. Your firm regularly publishes economic and market research. What is your view on the US and global economies, as well as your expectations for 2022?
Well, we are quite concerned about inflation, and it’s not just that inflation has been high. What many people don’t appreciate enough in my view is that inflation is a process. Think about coming to a stop at a red light. When the light turns green, meaning when the supply chain issues are resolved, not everybody gets going at once. And so similarly, when people hear about inflation, everybody wants to somehow make up for it. That means they’ll ask for higher wages, they’ll try to push up prices. So the longer this lasts, the more the risk that this is going to get out of control. And the Federal Reserve even now is priced in to maybe go to neutral. And that’s just not “Good enough.”
Now all of that is paired with the growth outlook, which on the one hand we have this reflationary environment where especially Asia hasn’t opened up yet and we should get a boost, also inflationary pressures. But at the other end of the spectrum, things feel very much “A late cycle.” And so that’s a very, very unique environment that things have been as condensed as they are and they make for some very interesting investment.
Merk Investments focuses on gold, precious metals and minerals. Can you …….