According to Standard Chartered, once uncertainty over the Federal Reserve’s tightening plan clears, the gold price will have time to shine. Gold quickly recouped its losses after the Fed’s announcement and made its way to the hard-to-reach level of $1,800. This came in response to the Fed’s statement that it had doubled its tapering rate, increasing it to $30 billion a month, and predicting three rate hikes for 2022.
“Gold is bullish as a more aggressive Fed is already priced in”
According to Standard Chartered precious metals analyst Suki Cooper, gold positions were relatively cautious ahead of the meeting, with price action suggesting that a number of headwinds are already pricing in:
Given its sensitivity to high inflationary pressures, gold likely priced in the possibility of accelerated tapering.
Attributing Thursday’s rally to the already pricing of a more aggressive Federal Reserve, Suki Cooper comments:
The gold price is starting to strengthen after the first rate hike in a walking cycle, or lower announcements due to historically early market moves.
cryptocoin.com As you can follow from the news, the markets took the view of both a new tapering program and an updated interest rate hike on Wednesday. The analyst recalls that the FOMC’s dot chart now shows three increases in each of 2022 and 2023 and two increases in 2024, after noting that the Fed accelerated tapering and raised inflation forecasts to $30 billion per month starting in mid-January.
According to the analyst, the price of gold will average $ 1,774 in 2022
According to the analyst, what the gold price will do when it reaches $1,800 will be critical, as this is a very strong resistance level:
Gold has recently started to follow real interest rates more closely than the dollar. While this will provide more upside risk for gold in the medium term, belief is low in the near term. Prices are likely to exceed $1,800 once again next year as the dollar weakens and real rates remain negative. We expect prices to average $1,774 in 2022.
At the time of writing, however, spot gold was trading at $1,808, up 0.54% daily, while gold futures were trading at $1,807, up 0.51% daily, according to TradingView data.
Suki Cooper: Despite pressures, precious metal turned out to be resistant
Standard Chartered forecasts gold to rise to $1,875 in the first quarter of next year. Suki Cooper shares the following information:
The physical market tends to set the floor. Chinese festival-related purchases are gaining momentum in the six weeks before Lunar New Year.
Suki Cooper states that gold wants to end the year with a loss of about 8.5%, but the precious metal is resistant and explains the reason as follows:
The gold price set its yearly highs at the beginning of the year. However, asset rotation based on high vaccine efficiency, which supports economic recovery, and the corresponding improvement in risk appetite, which supports reflation trade, put pressure on gold.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, asset or service in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.