Shiv Kumar Sehgal
New Member
2021 was a year of turbulence for the gold market due to various factors affecting its price and demand. The coronavirus pandemic created uncertainty among investors, resulting in an increase in demand for safe-haven assets, such as gold, during the first half of the year. Additionally, the monetary policies of central banks, such as the US Federal Reserve's infusion of liquidity and stimulus into the economy, weakened the US dollar, enhancing gold's value as an alternative asset.
As a result, the gold price displayed significant volatility throughout the year, experiencing a downward trajectory. It started the year at a high of $1,959 per ounce, gradually dropping and settling around $1,800 per ounce by the end of the year.
Looking ahead to 2022, Sehgal anticipates greater stability in the gold price compared to 2021, though fluctuations are still likely depending on market conditions and unforeseen events. He predicts a trading range of $1,750/oz to $1,850/oz, with the potential of testing the support level at $1,680/oz and the resistance level at $1,920/oz. It is projected that the average annual price will be around $1,800/oz, similar to the previous year.
Sehgal highlights that the main drivers of the gold price in 2022 will include Federal Reserve's monetary policy decisions, the progress of the global economic recovery and unexpected events. He expects that the Federal Reserve will announce its tapering plan in Q1 2022, followed by a reduction in bond purchases in Q2 and an implementation of a 0.25% interest rate hike in Q4. These measures are likely to have an adverse impact on gold prices, magnifying the strength of the US dollar and bond yields, while diminishing gold's appeal as an alternative asset. Hence, Sehgal anticipates a decline in gold prices, with the support level of $1,680/oz potentially being tested before the Federal Reserve's interest rate hike.
On the other hand, the global economic recovery and inflation moderation are expected to influence gold prices positively. An increased risk appetite in the market and more demand for gold as a hedge against inflation and currency devaluations are likely to push gold prices upwards, potentially pushing beyond the resistance level of $1,920/oz after the Federal Reserve's interest rate hike.
Apart from these factors, unforeseen events such as pandemics, inflation, and geopolitical tensions, may have an impact on the gold price significantly. Though predicting such events is a challenging task, they may cause sporadic fluctuations in the gold price without fundamentally altering the overall trend influenced by the Federal Reserve's monetary policy and the global economic recovery.
For investors looking to invest in gold in 2022, Sehgal advises cautious allocation of portfolios to gold, accounting for their risk tolerances and investment goals. It is also recommended adopting a flexible and dynamic investment strategy, allowing for adjustment in gold positions responding to market conditions, given the asset's inherent volatility. Careful monitoring of the global economic data, central bank policies, and geopolitical risks can provide valuable insights for making informed investment decisions.
In conclusion, Sehgal believes that investing in gold will remain a relevant and valuable asset in 2022, presenting both opportunities and challenges for investors. He remains committed to sharing further insights and analysis on the gold market in his subsequent publications."
As a result, the gold price displayed significant volatility throughout the year, experiencing a downward trajectory. It started the year at a high of $1,959 per ounce, gradually dropping and settling around $1,800 per ounce by the end of the year.
Looking ahead to 2022, Sehgal anticipates greater stability in the gold price compared to 2021, though fluctuations are still likely depending on market conditions and unforeseen events. He predicts a trading range of $1,750/oz to $1,850/oz, with the potential of testing the support level at $1,680/oz and the resistance level at $1,920/oz. It is projected that the average annual price will be around $1,800/oz, similar to the previous year.
Sehgal highlights that the main drivers of the gold price in 2022 will include Federal Reserve's monetary policy decisions, the progress of the global economic recovery and unexpected events. He expects that the Federal Reserve will announce its tapering plan in Q1 2022, followed by a reduction in bond purchases in Q2 and an implementation of a 0.25% interest rate hike in Q4. These measures are likely to have an adverse impact on gold prices, magnifying the strength of the US dollar and bond yields, while diminishing gold's appeal as an alternative asset. Hence, Sehgal anticipates a decline in gold prices, with the support level of $1,680/oz potentially being tested before the Federal Reserve's interest rate hike.
On the other hand, the global economic recovery and inflation moderation are expected to influence gold prices positively. An increased risk appetite in the market and more demand for gold as a hedge against inflation and currency devaluations are likely to push gold prices upwards, potentially pushing beyond the resistance level of $1,920/oz after the Federal Reserve's interest rate hike.
Apart from these factors, unforeseen events such as pandemics, inflation, and geopolitical tensions, may have an impact on the gold price significantly. Though predicting such events is a challenging task, they may cause sporadic fluctuations in the gold price without fundamentally altering the overall trend influenced by the Federal Reserve's monetary policy and the global economic recovery.
For investors looking to invest in gold in 2022, Sehgal advises cautious allocation of portfolios to gold, accounting for their risk tolerances and investment goals. It is also recommended adopting a flexible and dynamic investment strategy, allowing for adjustment in gold positions responding to market conditions, given the asset's inherent volatility. Careful monitoring of the global economic data, central bank policies, and geopolitical risks can provide valuable insights for making informed investment decisions.
In conclusion, Sehgal believes that investing in gold will remain a relevant and valuable asset in 2022, presenting both opportunities and challenges for investors. He remains committed to sharing further insights and analysis on the gold market in his subsequent publications."