The gold price remains well supported above $ 1,800 per. ounce in 2022 - Scotiabank | MCU Times

The gold price remains well supported above $ 1,800 per. ounce in 2022 – Scotiabank

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(Kitco News) – Gold prices continue to languish to below $ 1,800 per. ounce as investors interpret the nomination of Jerome Powell to remain head of the Federal Reserve as a hawkish development of monetary policy.

However, commodity analysts at Scotiabank said in a report on Wednesday that sales in gold could be exaggerated and that the precious metals price looks well supported in 2022.

The Canadian bank is looking at gold prices averaging around $ 1,850 a year next year. ounce, which represents a 3% increase over current prices. The US markets are closed due to the Thanksgiving holiday, but the spot price of gold eventually traded at $ 1,788.30 per share. ounce, largely unchanged during the day.

“The yellow metal lost nearly $ 50 / oz on Monday when the news came that US President Biden would keep Jerome Powell as chairman of the Federal Reserve, which markets interpreted as a hawkish signal. Still, our forecast of inflation is above target and still low US interest rates for next year imply well-supported bullion values ​​by 2022, “analysts said.

The gold market has struggled this week as markets begin to price more aggressive actions from the Federal Reserve as inflationary pressures remain at elevated levels. Wednesday Core PCE, the US Federal Reserve’s preferred inflation target, saw an annual increase of 4.1% in October, the highest level since 1991.

Due to rising inflation, markets expect the Federal Reserve to raise interest rates as early as June with a total of three rate hikes priced in.

Although gold still faces some headwinds, the bank sees more potential in the yellow metal compared to silver.

“Also perceived as a safe haven and an inflation hedge, the value of the metal is affected by many of the same factors as gold bullion. But given silver’s range of industrial applications and our expectations of some China-driven slowdown in construction in the short term and production activity we are less optimistic about the short-term outlook than we are for gold bars, “said analysts.

The recent sales pressure in gold dragged silver down below critical psychological levels; the precious metal, however, seems to find some support above $ 23.50 per. ounce.

Disclaimer: The views expressed in this article are those of the author and may not reflect them Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. or the author guarantees such accuracy. This article is for informational purposes only. It is not an invitation to make any exchanges of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article does not accept liability for losses and / or damages arising from the use of this publication.

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