Gold prices rebounded above the $1,800 level on Friday, closing the highest in nearly four weeks. While investors are wondering how gold will go next, Colin Cieszynski, chief market strategist at SIA Wealth Management, and Juan Carlos Artigas, head of global research at the World Gold Council, are evaluating the market. we too cryptocoin.com We have compiled the opinions of experts for our readers.
Uncertainties support prices, according to Colin Cieszynski
Strategist Colin Cieszynski says the precious metal’s rise above the key $1,800 level is due to “wide capital flows leaving risk markets and heading towards defensive ports like gold.” In a statement, the strategist makes the following assessment:
At the same time, uncertainty surrounding the potential impact of the Omicron wave on the economy, exacerbated by tax loss sales and the bulls and bargain hunters stepping aside, bolsters prices.
Also, Colin Cieszynski notes that there are ‘growing concerns about inflation’ that are enough to force the Federal Reserve and the European Central Bank to step up their bond-buying cuts and to force the Bank of England to actually raise interest rates.
The Bank of England raised the benchmark interest rate by 15 basis points to 0.25% on Thursday, surprising the market. The European Central Bank, meanwhile, has kept key interest rates unchanged and reiterated that the Pandemic Emergency Purchase Program will end in March as planned. Both moves come after the latest forecasts for the Federal Reserve point to three rate hikes in 2022 and the phasing out of the central bank’s bond purchases by March next year.
“Demand for gold as portfolio protection will increase”
Juan Carlos Artigas, head of global research, commented that in early 2021, “as newly developed vaccines become available, investor optimism has fueled a reduction in portfolio hedges” and explains the impact on the gold price:
This initially negatively impacted gold’s performance, but after hitting its annual low in March, gold recovered.
Evaluating its performance for the rest of the year, the head of global research states that there is a rivalry between the forces and underlines the following points:
Uncertainty about new variables and stronger consumer demand, coupled with rising risks of persistently high inflation, pushed gold forward, while higher interest rates and a stronger US dollar created headwinds.
Juan Carlos Artigas says the World Gold Council believes gold will ‘experience similar dynamics in 2022’. According to Artigas, the possibility of high inflation is likely to linger due to the negative effects of Covid-induced monetary and fiscal policies, disruptions in the supply chain and a tight labor market. Artigas opens it this way:
Combined with higher stock market valuations, new Covid variants and a growing appetite for less liquid assets, all of this will likely result in ‘more frequent market pullbacks and increased demand for gold as a portfolio hedge.
However, Artigas warns that gold could also face challenges if interest rates rise faster than currently anticipated. However, he expects interest rates to remain low from a historical perspective, even if there is a rise in interest rates, leading to an increased “need” for a high-quality, liquid asset like 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.