Retail investor sees gold reach record highs above $ 2,000 in 2022

Welcome to Kitco News’ Perspectives 2022 series. The new year will be filled with uncertainties as the Federal Reserve seeks to pivot and tighten monetary policies. At the same time, the inflationary threat continues to grow, meaning that real rates will stay in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.

(Kitco News) – Retail investors remain markedly bullish on gold prices next year as the precious metal appears to end 2021 with a loss of nearly 4%.

Gold prices saw a solid upswing, surpassing $ 1,800 an ounce on the last trading day of 2021. Spot gold prices last traded at 1,827, $ 95 per ounce; however, the market started the year at $ 1,898 an ounce.

The year has been relatively disappointing for the gold market, which has seen quite volatile movements. Including a flash crash in August that saw the price drop below $ 1,700 an ounce. Gold prices have struggled to gain bullish attention even as real interest rates have fallen into historic negative territory, under extraordinary inflationary pressure.

Analysts note that the rise in consumer prices over the past year has met expectations that the Federal Reserve will tighten interest rates sooner than expected. At its December monetary policy meeting, the U.S. central bank announced that it would end its monthly bond purchases by March and could hike interest rates three times in 2022.

However, US monetary policy does not scare many retail investors who appear to be markedly bullish on gold as the new year approaches. According to Kitco News’ annual outlook survey, a clear majority of Main Street investors expect gold prices to hit new highs in 2022.

This year, nearly 3,000 people took part in Kitco’s annual online survey. Of those 1,605, 54% said they saw gold prices above $ 2,000. Meanwhile, 592 voters, or 20%, said gold would trade between $ 1,900 and $ 2,000.

In last year’s Price Outlook Survey, 84% of retail investors expected gold prices to exceed $ 2,000.

The results show that only 352 retail investors or 12% see gold prices remaining relatively stable in the current range between $ 1,800 and $ 1,900 per ounce.

Meanwhile, 158 or 5% of participants see the price of gold trading between $ 1,700 and $ 1,800 an ounce.

On the purely bearish side, 109 voters or less than 4% see gold prices trading between $ 1,600 and $ 1,700 an ounce, and 130 people just over 4% see gold prices plummet. below $ 1,600 per ounce.

There have been a few bearish calls that have stood out in recent weeks. Analysts at JPMorgan Research said gold prices could average around $ 1,520 by the fourth quarter of 2022.

Meanwhile, Georgette Boele, senior currency and precious metals strategist for the Dutch bank, said she expects gold prices to drop to $ 1,500 an ounce by the end of next year. .

Wall Street analysts don’t have a clear consensus on where gold prices will go next year. Many analysts have said that while the specter of a rate hike next year could weigh on gold prices, much of the bad news has been incorporated.

Many banks see gold prices trading in a reasonably wide range, between $ 1,800 and $ 2,000. The most important factor for the price of gold in 2022 remains real interest rates. Although the Federal Reserve is looking to hike interest rates three times next year, many economists expect inflation to stay above 4%, which means real rates will stay deeply in. negative territory. Almost all economists predict that the Federal Reserve will stay well below the inflation curve in 2022.

Among the bullish banks, Goldman Sachs is one of the more bullish. In November, analysts said they saw prices surpass $ 2,000 an ounce by the end of the year.

Wells Fargo is also bullish on gold next year, looking for $ 2,000 an ounce as precious metals games catch up with the rest of the commodities complex. John LaForge, head of real assets strategy for gold at Wells Fargo, will be sensitive to US monetary policy in 2022; however, he added that the Federal Reserve is unlikely to adopt overly aggressive monetary policies.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.

About Timothy Cheatham

Check Also

Bank of Israel, BIS and Hong Kong cenbank to test feasibility of retail CBDC

An Israeli flag flies in front of the Bank of Israel building in Jerusalem August …