According to an investment firm, although the gold market is in a long-term uptrend, it still needs to go through the current consolidation period. In a report released on Tuesday, Haywood Securities analysts say they have lowered their price targets for this year until 2022, but expect to see higher prices after 2023. Haywood analysts’ evaluations and forecasts on gold price cryptocoin.com we have compiled for you.
Analysts’ forecasts for the coming years
Looking at the updated forecast, Haywood analysts expect gold prices to start around $1,800 per year on average, down slightly from the previous estimate of $1,815. For the next year, the firm predicts that the average gold price will fall from $1,900 to $1,850. However, analysts are revising the previous estimate of $1,800 to $1,900 by 2023.
Analysts say gold is facing some tough headwinds from a stronger US dollar and rising bond yields in the near term. Bond yields rose as interest rates rose. Markets are currently waiting for the Federal Reserve to tighten monetary policy, which includes reducing monthly bond purchases before the end of the year and potentially raising interest rates by June.
“Gold has been successful in stagflation environments”
On the other hand, when looking at bullish factors, analysts state that slowing growth and rising inflation create a positive environment for the precious metal. “As growth slows and inflation rises, we are concerned that China and the broader global economy may be ready for stagflation,” analysts say in the report. Analysts underline the following points in the report:
Historically, gold has been successful in stagflation environments as high inflation and market volatility support capital preservation, and low real interest rates support the opportunity cost and growth risk drivers. We believe that the precious metals complex is in a long-term uptrend and long-term macroeconomic factors continue to be constructive. However, gold remains a tangible, tradable and durable store of value.
Analysts’ comments came after the gold market continued to struggle to attract sustained bullish momentum and remained stuck below $1,800. December gold futures were last traded at $1,792.70, down 0.78% on the day. While gold prices may struggle through 2022, Haywood analysts continue to see solid value in the low-value mining sector:
The mining industry is trading at historic lows relative to gold and the market as a whole, despite strong fundamentals offered by the industry, including a free cash flow market return of around 6.85%.
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