Why could 2022 be a gold year !?
Why could 2022 be a gold year !?
Turbulent stock markets and political turmoil worry investors. This also increases the interest in gold. Experts expect top prices for 2022.
Frankfurt, the year 2022 could be a year of gold. More and more experts are expecting a comeback of the precious metal in its classic function: as a lifeline in turbulent times.
Basically, the stock market year 2021 was made for a solid investment in gold right from the start. The environment was ideal for the "safe haven" among investments. We had exploding national debts around the world, historically low interest rates, a few geopolitical unrest areas that should not be despised, uncertainty caused by the corona pandemic - and, last but not least, rising inflation rates.
In Germany, according to the Federal Statistical Office, the annual inflation rate in November was 5.2 percent, which is the highest it has been for almost 30 years. In the United States, the inflation rate climbed almost to a forty-year high of 6.8 percent. Actually, this mix should have spoken in favor of a good gold year. But now, so shortly before the store closes, gold price bulls are looking rather disappointed at the price development of the yellow precious metal.
Disappointing year for gold investors
While stock indices such as the Dow Jones and Dax climbed to new record highs and are likely to close with strong price gains in 2021, the gold price quoted in dollars has even recorded a decline of six percent at times since the beginning of the year. This is also disappointing because in view of the uncertainties surrounding Covid-19, the year 2020 had tempted investors to stock up heavily on gold. In the previous year, gold had achieved an increase in value of around 25 percent. In addition, for the first time ever, the quotations had cracked the magic mark of $ 2,000 and set new record values.
Carsten Mumm, chief economist of the private bank Donner & Reuschel, sees one reason for the weak price development of gold this year in the weak economic recovery after the Corona recession in many emerging countries - whose populations are among the most important gold jewelry buyers. “With a view to 2022, however, there are some arguments in favor of rising prices again.”
Despite initial key rate hikes by some central banks and likely rising interest rates for government bonds, Mumm says deeply negative real interest rates are likely to remain widespread in view of the sustained strong inflationary pressure.
Signs of rising gold prices
With a view to the stock markets, the economist adds that “more fluctuations are to be expected here, as has been the case since autumn”, since it is uncertain “how quickly the main stress factors, the corona restrictions and, above all, the traffic jams in front of large container ports will dissolve and at the same time inflation is dampening many people's mood to consume. ”In contrast, an economic upturn is to be expected in the second half of 2022, from which emerging countries should also benefit more. "So some signs point to better times for gold investors."
For Benjamin Louvet, fund manager at OFI Financial Investment, gold remains attractive - even if the precious metal is currently in a downward trend since leaving the all-time high of 2063 dollars. According to Louvet, the market is already largely anticipating growth-related rate hikes. In his opinion, there is a risk that “these expectations will not be met and the markets will correct sharply”. The market underestimates the fact that the US Federal Reserve is gradually recognizing “that this is not a temporary increase in prices. This prompts us to set our gold price target high in 2022, above $ 2,800 an ounce. ”
Is the next gold rally coming?
A look at the sober chart technique can confirm this assessment and the current consolidation could lay the foundation for the next gold rally. The buy signals necessary for this would be given if the breakout above the 2021 tops in June (1921 dollars) and January (annual high of 1962 dollars) succeeds. In this case, the way would be free again to the recent record high of August 2020 at $ 2071.
Anyone who wants to see even higher prices as a gold fan must hope that this 2071 dollar price barrier will be overcome. Then a long-term gold bull market, which last existed between 2001 and 2011, could start. The next big target price would be around $ 3,000. On the other hand, the late stock market star Andr Kostolany once said: “Anyone can speculate. Doing it at the right time - that is the art ”.