Relevance up to 10:00 2022-01-08 UTC+00
Gold prices steadily increased during the last trading day of 2021, rising above the level of $ 1,800 an ounce.
The past year has been a disappointing one for the gold market, which has seen fairly volatile movements including the sudden collapse in August when the price fell below $ 1,700 an ounce.
Analysts noted that the increase in consumer prices was justified by expectations that the Fed will tighten interest rates earlier than expected. During its monetary policy meeting in December, the US central bank clearly stated that it would stop buying monthly bonds by March and could raise its interest rate three times in 2022.
Nevertheless, US monetary policy does not intimidate many retail investors. According to the annual outlook survey, the clear majority of Main Street investors expect gold prices to rise to new highs in 2022.
It can be recalled that almost 3,000 people took part in the annual online survey last year. Of these, 1,605 people, or 54%, said that the price of gold would exceed $ 2,000. Meanwhile, 592 voters, or 20%, answered that it would cost between $ 1,900 and $ 2,000. Only 158 participants, or 5%, believe that that gold prices will be between $ 1,700 and $ 1,800 per ounce.
On the bearish side, 109 voters, or less than 4%, believe that gold prices will fluctuate between $ 1,600 and $ 1,700 an ounce, while 130 people or just over 4%, expect prices to decline below $ 1,600.
Several bearish moods were seen in the last weeks of December.
Analysts at JPMorgan Research said gold prices could average around $ 1,520 by the fourth quarter of 2022.
At the same time, Georgette Boele, senior strategist at the Dutch bank for foreign exchange and precious metals, said that gold prices would fall to $ 1,500 an ounce, and maybe even lower by the end of next year.
Wall Street analysts do not have a clear consensus on where gold prices will go next year. Many say that despite the upcoming rate hike, which could put pressure on gold prices, most of the bad news has been factored into the price.
Many banks predict prices in a wide range from $ 1,800 to $ 2,000. The most significant factor affecting prices is interest rates. But even though the Fed intends to raise interest rates three times, many economists believe that inflation will remain above 4%, which means that there is a growing probability that real rates will remain negative.
Almost all economists predict that the Federal Reserve System will lag significantly behind the inflation curve in 2022.
Among banks, Goldman Sachs was the most optimistic about gold prices. In November, analysts said prices would rise above $ 2,000 an ounce by the end of the year.
Wells Fargo is also optimistic about prices, expecting $ 2,000 an ounce as the precious metal catches up with the rest of the commodity complex. Wells Fargo gold’s head of real assets strategy added that he believes it is unlikely that the Fed will adopt an overly aggressive monetary policy.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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