Gold started 2022 with high hopes after a disappointing year for its investors. However, over a month later, the yellow metal fluctuated back and forth around $1,800 and failed to break out of its range. While the precious metal is supported as a safe haven by rising inflation concerns, it is also under pressure from central banks with interest rate hikes to control inflation. In this perspective, strategists at ANZ Bank reveal their gold forecasts for the first quarter of 2022. ANZ Bank’s forecasts cryptocoin.com We have prepared for our readers.
ANZ Bank forecasts $1,800 for gold in the first quarter
Strategists at ANZ Bank expect gold prices to hover around $1,800 by the end of the first quarter, saying, “Central banks’ hawkish stance is blowing in the opposite direction for gold investment, but geopolitical tensions and conflicts may increase the yellow metal’s safe-haven appeal.”
Markets are focused on the US CPI data to be released today. Consensus estimates mark the highest figures for the US in four decades. If the data comes in line with the forecasts, investors are also choosing to act cautiously, as this could cause the Federal Reserve to become more aggressive. A hawkish Fed means higher real interest rates and a more valuable dollar, so it’s a headwind for your horse. However, ANZ Bank strategists point out that high inflation may lessen this effect:
Gold’s ground is breaking down as central banks become more hawkish. However, rising inflation and geopolitical risk partially offset the impact of tightening monetary policies. Individual investments and physical purchases provide flexibility. We estimate that gold will be traded at $1,800 towards the end of the first quarter of 2022.
Gold has been considered a very valuable commodity for thousands of years, and the price of gold is widely followed in financial markets around the world. Most commonly traded in US dollars (XAU/USD), the price of gold tends to rise as stocks and bonds fall. The yellow metal is considered a reliable safe-haven as it is seen as a value protection instrument. However, since it has no income, it is adversely affected by the increase in real interest rates.
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