In this current gold market, it can be confusing to decide whether to buy, hold, or sell gold. You want the option that will best benefit you, but sometimes that can be hard to decide. Keep reading for an in-depth analysis of the gold price forecast for 2022, the factors affecting the market, and expert opinions to help guide your decisions.
Gold prices by the end of 2021
In recent times, gold prices have certainly reflected the state of the world around it, and this was more than evident in 2021.
In 2021, gold prices fell 4 percent, ending the year at US $1820 per ounce, marking its first decline since 2018. The first quarter of the year showed the most decline. However, as the second quarter rolled around, improvement was seen. From March to December, gold was on an upwards trend, and in November and December alone, prices rose from US $1750 to $1820 at the conclusion of the year. Gold prices officially ended the year at $1820 an ounce.
The world’s current gold situation
Several global factors have affected and will continue to affect the price of gold in 2022.
The second half of 2021 saw a rise in inflation rates, and this supported the rise in gold prices seen that year. As previously mentioned, prices rose from US $1750 to $1820 in November and December alone, riding on the back of increasing inflation.
The early spread of COVID-19 also affected gold prices, by increasing uncertainty in future economic and financial markets causing the demand for gold to increase and in turn pushing prices upwards. COVID-19 is currently dictating the global economic market, which in turn affects the price of gold, and this will continue to happen in 2022.
There is also a general correlation between the value of the US dollar and the price of gold as it is dollar-denominated. Depending on the strength of the US dollar in 2022, the price of gold could be affected.
After ending 2021 at $1820, experts are now looking to predict the path of gold prices in 2022. Numerous analysts in the field have made their predictions about gold prices in 2022, basing their arguments on inflation and the strength of the US dollar, and the opinions are varied.
Many analysts believe that gold will maintain a level similar to current prices.
Analysts at Forbes predict, “Demand for hard assets will continue to push prices, and with the jewellery market making a comeback, gold is set to rally.” Offering a similar opinion while speaking to goldsilver.com, revered and respected fund manager Rick Rule stated “Higher gold prices is a when question, not if. They don’t go higher, they go much higher. …If they merely revert to the mean I believe demand will triple or quadruple.”
Goldman-Sachs analyst Damien Courvalin also predicts a bright and shiny future for gold prices. He expects gold to reach $2,000 USD in Q1 2022, and have the potential to increase even further depending on US inflation in the first quarter of the year.
However, such sentiments are not shared by all. Analysts at the World Bank are predicting a decline in gold prices in 2022, and believe this decline will only continue through to the next 5 years (pictured above). While they do believe that the decline is gradual, their forecast has gold prices rounding out the year at approximately $1,740.
Other analysts believe the drop will be even bigger. While speaking to CBS, investment banker and precious metals strategist Joni Teves said “We are expecting gold prices to head lower towards the end of this year,” UBS issued a similar report (pictured below) and forecast, predicting gold prices to fall gradually throughout the first quarter of the year, and make their decline to approximately $1,600.
While the opinions differ slightly, there seems to be one common point of agreement – economic recovery from the Covid-19 pandemic and the strength of the US dollar and amount of inflation will dictate gold prices in 2022. As outlined, some analysts believe that this will cause upwards momentum in gold prices, while others believe that the precious metal is heading for a drop.
What we can do for you
Here at GoldSurvival Guide, we can help New Zealanders navigate the gold market in 2022. Whether you are looking to find out more about the value of gold in New Zealand, or you are looking for a reliable New Zealand gold merchant, we can help you. If you have a question, or would like to know more, contact Gold Survival Guide’s experts for honest, reliable, and friendly advice.