Strategic gold investment technique to hedge against inflation

Mr. Cao Yang, the renowned gold investment analyst from China, suggested that the ideal price to invest in gold in the second half of 2022 would be 100 USD above or below 1,650 USD/oz. He has also shared 7 major factors that affect the price of gold.
According to the analysis by Mr. Cao Yang, the gold price will fluctuate between 1,675 USD/oz and 2,075 USD/oz in 2022. In the second half of 2022, the lowest price to invest in gold would be between 1,550 USD/oz and 1,750 USD/oz. 
He suggested a technique for investors to refer to while investing in gold, which is the “1-1-2-2-4 formula.” Taking the gold price of 1,700 USD/oz as the target price, investors are advised to increase their gold investment by 10%, 10%, 20%, 20%, 40% for every 20 USD/oz dropped. (Refer to the table below.)
Meanwhile, Mr. Cao Yang has suggested 7 major factors that will affect the price of yellow gold to assist investors in gold investment:
  1. A sudden occurrence of a natural disaster or human calamity may increase demand for gold, resulting in an increase in gold prices.
  2. Gold prices will rise as a result of the world’s easy monetary policy.
  3. The continual decrease of the USD Index will increase the price of yellow gold.
  4. The crisis caused by COVID-19 or local conflicts will push the gold price to a higher level.
  5. The inflation crisis will cause the gold price to increase.
  6. The escalation of geopolitical tensions raises the price of gold.
  7. By refereeing to the law of supply and demand, a sudden decrease in the supply of yellow gold will increase the price of yellow gold.
Once any of the phenomena mentioned above happens, it will be the right time for investors to purchase yellow gold, or vice versa. 
The comments regarding future trends of yellow gold were made by Mr. Cao Yang in Gold Investment during the interview with JewelMAG.
The gold price will fluctuate in a short period of time, but the trend remains unchanged.
Furthermore, Mr. Cao Yang identified six major factors that will influence the trend of gold prices in the second half of 2022, which include: the tightening of Federal Reserve monetary policy; the weakening economic growth trend of the European Union and the United States; geopolitical tensions; long-term inflation; weak commodity and Bitcoin expectations; and unstable credit currency. 
The tightening of Federal Reserve monetary policy is expected to further weaken the current economy. Geopolitical tensions will not show any positive signs. Commodities and Bitcoin are expected to weaken, resulting in the price of yellow gold dropping in a short period of time. However, the trend of investing in yellow gold will still be apparent.
The evaluation made by Mr. Cao Yang by referring to the investment market, the trend of digitalization is unstoppable due to the outbreak of COVID-19 and is expected to affect the fields of financial, healthcare, education, automation, as well as other vital regions. Therefore, it is suggested to have a long-term investment in these regions. On the other hand, the conflict between Russia and Ukraine and the weakened oil and gas supply promote concern over energy security. Therefore, investment in renewable energy will be a good choice for short-term investment.
Focus on inflation-hedging goods and investments
Because of the long-term nature of expansionary monetary policy, raising interest rates is now a popular option for many countries seeking to hedge against inflation. Although global inflation is expected to come, investors are advised to be prepared for inflation to be normal in a macroeconomic environment.
Therefore, from the point of view of an investor, we should focus on these inflation-hedging goods and investments, which include: commodities (oil and gas), precious metals, crops, government-issued inflation-linked bonds, and real estate. Meanwhile, the long period of inflation will further exacerbate the macroeconomic environment, so it is important for investors to have a flexible and macro-investment strategy.
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