cryptocoin.com As we reported, the Federal Reserve announced on Wednesday that its asset purchase reduction is accelerating and signaled three rate hikes in 2022. Gold prices reacted mildly to this and the precious metal climbed above $1,800. As we enter the last weeks of 2021, many analysts are starting to put forward their 2022 forecasts. So how will gold perform next year?
Strategist: Gold and silver will perform well
Chester Ntonifor, FX Strategist at BCA Research, discussed the direction of the US dollar and the performance of gold and silver next year. “The Fed will raise interest rates in 2022 and the European Central Bank will lag behind the Fed,” Ntonifor said. He stated that this situation is already seen in dollar and euro pricing. Ntonifor said that the dollar index or US Dollar Index (DXY) will likely fall to 90 in the next 12 months, but in the short term, investors can expect continued strength.
I don’t think it will crash, but a drop from the current level of 96 to 90 over the 12 to 18 month horizon seems pretty reasonable to me.
Ntonifor expects precious metals, gold and silver to perform quite well if inflation continues in 2022. However, he states that he especially likes silver. He thinks that the gold/silver ratio is high as one of the reasons behind this. He also points out that silver is a metal used in many sectors.
So, why has gold fallen in the last 12 months despite inflation this year? According to the strategist, some of the reasons for this are the rise in the US dollar index, the change in real returns and the price increase in other commodities. He also cites the tendency of investors to cryptocurrencies as another reason.
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