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    In 2022, the international gold price may still fluctuate

    2022-01-04 | Pageviews: CHANGZHOU FOAN M AND E CORPORATION
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    In 2021, the trend of international gold price surprised most investment institutions. In the context of COVID-19's ups and downs, global monetary policy easing and inflation intensification, gold as a haven for investment haven't been as popular as expected, and its futures price has gone down for the first time in 3 years. Looking forward to 2022, market expectations for gold prices are significantly divided, but most people believe that the market is facing more variables and may fluctuate frequently.

    Most industry institutions have predicted that the international gold price will stand at US $2000 per ounce in 2021. This year, the gold price fell all the way at the beginning of the year, falling below US $1700 per ounce in the first quarter, falling back after a significant rebound in the second quarter, and then fluctuated at the level of US $1800. On December 31, 2021, the main contract of gold futures on the New York Mercantile Exchange closed at US $1828.6 per ounce, down about 3.5% from the closing at the end of 2020.

    Some analysts pointed out that the promotion of the new crown vaccine in 2021 boosted confidence in world economic recovery, boosted investors' risk appetite, led to a decline in the proportion of gold in various portfolios, and continued to put pressure on gold prices.

    Around the gold price trend in 2022, market participants have obvious differences. They believe that global monetary policy, inflation level, recovery degree and epidemic situation will affect the gold price trend, but these factors are intertwined and highly variable, which may aggravate the gold price fluctuation.

    First, tightening monetary policy in developed economies will put pressure on gold prices. In December 2021, the Federal Reserve announced that it would accelerate the reduction of asset purchase scale and clearly release the signal of interest rate increase in 2022; In the same month, the Bank of England announced that it would raise its benchmark interest rate, becoming the world's first major central bank to raise interest rates since the outbreak of the epidemic. ANZ predicts that as major economies begin to withdraw from monetary easing and economic stimulus plans, gold prices will lose some support in 2022. The trend is expected to be strong first and then weak, and the annual average price is about US $1725 per ounce.

    Secondly, maintaining high inflation may raise gold price expectations. Avi Hanbro, an executive of BlackRock, an asset management giant, believes that the most important factor affecting the price of gold is the real interest rate. According to the current judgment, inflation will run through 2022. If the trend exceeds expectations, the real interest rate will not rise significantly, or even decline, so as to further highlight the investment value of gold.

    According to the research data of the World Gold Council, gold prices tend to be strong when the inflation rate exceeds 5%. Even when the inflation rate is in the range of 2% to 5%, investment in gold is expected to achieve considerable returns.

    The German Commercial Bank predicts that the current inflation rate in the United States and the euro zone has exceeded or approached 5%, and there is no sign of easing in the short term, and the gold price is expected to regain its momentum in 2022. Societe Generale believes that the price of gold is expected to exceed US $1900 per ounce in 2022.

    Thirdly, the trend of the epidemic affects the expectation of economic recovery, and then intensifies the "seesaw effect" of stock price and gold price. Some market analysts believe that in the past year, the US and European stock markets have reached a new high in the past year, facing multiple pressures such as their own adjustment demand, tightened market liquidity and the spread of COVID-19's drug. Once the stock market earthquake triggers risk aversion, investors are expected to pour into the gold market. Shengbao Bank of Denmark believes that many uncertainties in 2022 are enough to support a gold bull market.

    The World Gold Council predicts that under the joint action of global monetary policy, inflation trend and other factors, the gold market will remain volatile in 2022, and the cyclical fluctuations of callback and rise may occur frequently.

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