Gold prices reached all-time highs in 2020, exceeding $2,000 an ounce, due to everything that the health crisis entailed due to the spread of the coronavirus throughout the world. Keep in mind that the yellow precious metal has been an excellent haven asset throughout its history and that it can be sold anywhere in the world.
Currently, we are in a different scene, in full economic recovery. The gold market is in a period of consolidation, which has led to a price that has moved within narrow margins. In 2021 and after the great year that the raw material had in 2020, gold has fallen by 6%, even though the rise in inflation, also by 6%. However, there are good expectations for next year. Will it be positive to buy gold bars in 2022? Next, we talk about some of the forecasts for the price of gold in the nearest future.
Inflation will boost the price of gold
According to forecasts made for Bloomberg by a Goldman Sachs analyst, Damien Couvali, inflation is one of the determining factors that will drive gold in the coming months of 2022. Why is this forecast made? It is believed that the reason gold is expected to rise is because of rising inflation. In October it had an increase of 6.2% and reached levels that exceeded those reached in 30 years.
Gold thus becomes an excellent asset to include in investment portfolios, to have greater diversification and protection against rising inflation. The analyst believes that gold may exceed $2,000 an ounce early next year. Will it be so?
Good prospects for gold over the next two years
A report from Haywood Securities analysts is very positive when it comes to gold and they have interesting forecasts for 2022 and 2023:
- They expect an average price of $1,850 an ounce in 2022 and $1,900 in 2023.
- They mention the factors that gold has against it in the short term: the strengthening of the US dollar, and the increase in the yields of treasury bonds due to the new rise in interest rates that is expected in 2022.
- There are also favorable factors: the slowdown in the recovery and economic growth and the rise in inflation also mentioned above.
- They affirm that gold has a positive long-term trend, and for this, they rely on positive macroeconomic factors for the precious metal. Gold is a tangible, fungible asset and an excellent store of value for the long term.
Other aspects that may favor gold in 2022
- The stock market is showing increased volatility. This may support the price of gold as some investors will turn to the precious metal to diversify and protect their portfolios.
- Gold has underperformed in cryptocurrencies and other assets in 2021. However, it remains a much more stable and safe asset than any of them in times of uncertainty or crisis.
What can we make clear from all this data? The forecasts are positive for the price of gold in 2022, although it must be taken into account that many aspects can affect it. The rise or fall in the price of precious metals depends on many factors. We must think long-term and remember the behavior of gold throughout its history.