“It’s Gonna Be An Interesting Year” Fund Manager Shares His Gold Forecasts!

While most investors are disappointed with the nearly 4% drop in the price of gold in 2021, one fund manager says investors should look at the precious metal’s price action from a more positive perspective. Market assessments and forecasts from VanEck’s gold strategy portfolio manager, Joe Foster. cryptocoin.com We have prepared for our readers.

Joe Foster: Markets seem to believe the Fed blindly”

Portfolio manager Joe Foster states in his latest gold market report that despite disappointing performance last year, gold has managed to achieve a new higher base around $1,800. Portfolio manager makes the following assessment:

Radical fiscal and monetary policies, along with the many uncertainties and risks brought on by the pandemic, have pushed gold to new heights as investors seek security. Since the pandemic collapse in March 2020, gold has been trading at an average of $1,817.

Joe Foster says inflation, which rose 7% year-on-year last month, should create a positive environment for gold, noting that the precious metal faced a significant headwind last year. Joe Foster notes that rising inflation was met with the increasing hawkish rhetoric of the Federal Reserve, and comments:

While we believe the Fed’s response to inflation may be little overdue, markets seem to blindly believe in the Fed’s ability to manage the economy.

“During inflationary times, gold outperformed in the second half”

At the same time, gold is struggling with increased momentum in the US dollar, record gains in equity markets, and fierce appetite for cryptocurrencies. Joe Foster expresses this situation as follows:

In a frenzy, most investors lack a sense of risk and see no reason to buy a safe-haven asset.

Gold

The portfolio manager adds that while gold is struggling to recover in the face of inflation, the precious metal still has plenty of time to catch up with the rest of the commodities sector:

There have been only two more inflationary periods in the last 50 years. The first was in the seventies, the second was from 2003 to 2008. In each of these inflationary periods, gold commodities underperformed in the first half and outperformed in the second half. It seems that markets do not take inflation or gold seriously until it proves to be stubborn.

2022 will be an interesting year for gold, according to Joe Foster

The portfolio manager says rising home prices and rising rents, companies competing for labor in a tightening labor market, rising food prices and consumers who are all making good money from the government’s pandemic spending measures are all factors that will continue to increase consumer price pressure.

However, the Federal Reserve notes that monetary policy remains the most important factor in driving gold prices. Currently, markets expect the Fed to tighten monetary policy this year. Markets see the potential for four rate hikes this year, the first in March. Expectations are also rising that the US central bank will cut its balance sheet before the end of the year. Joe Foster notes that some of these prospects may be a little too aggressive:

The Fed has a history of staying too comfortable for too long. This got the economy in trouble as the tech and housing bubbles burst. This time we have a bubble and inflation above all else.

Gold

UBS examined the performance of gold in the six months before and after each of the last three initial rate hikes of each cycle in 1999, 2004 and 2015. The bank found that gold fell between 5% and 10% in the six months preceding each initial increase, and gold gained between 10% and 20% in the six months following each initial increase. Referring to the Bank’s findings, Joe Foster makes the following inference:

Perhaps gold’s poor performance in 2021 is normal and its behavior before the rate hike. 2022 will be an interesting year.

Contact us to be instantly informed about the last minute developments. twitterin, 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.


source site-2