Retail Investor see gold hitting record highs above $2,000 in 2022

Retail investors remain significantly bullish on gold prices next year as the precious metal looks to end 2021 with nearly a 4% loss.

Gold prices have seen a solid push higher, moving above $1,800 an ounce on the last trading day of 2021. Spot gold prices last traded at $1,827.95 an ounce; however, the market started the year at $1,898 an ounce.

It has been a relatively disappointing year for the gold market, which saw some pretty volatile moves. Including a flash crash in August that saw the price drop below $1,700 an ounce. Gold prices have struggled to attract bullish attention even as real interest rates fell to historic negative territory, driven by extraordinary inflation pressure.

Analysts note that the rise in consumer prices this past year has been met with expectations that the Federal Reserve will tighten interest rates soon than expected. At its December monetary policy meeting, the U.S. central bank signaled that it would end its monthly bond purchase by March and could raise interest rate three times in 2022.

However, U.S. monetary policy is not scaring many retail investors who appear to be significantly bullish on gold heading into the new year. According to Kitco News' annual outlook survey, a clear majority of Main Street investors expect gold prices to push new record highs in 2022.

This year, nearly 3,000 people participated in Kitco's annual online survey. Of those 1,605, 54% said they see gold prices above $2,000. Meanwhile, 592 voters, or 20%, said that gold would trade between $1,900 and $2,000.

In last year's outlook price survey, 84% of retail investors expected gold prices to rise above $2,000.

The results show that only 352 retail investors or 12% see gold prices holding relatively steady in the current range between $1,800 and $1,900 an ounce.

Meanwhile, 158 or 5% of participants see gold prices trading between $1,700 and $1,800 an ounce.

On the outright bearish side, 109 voters or less than 4% see gold prices trading between $1,600 and $1,700 an ounce, and 130 people slightly more than 4% see gold prices dropping below $1,600 an ounce.

There have been a few bearish calls that have stood out in recent weeks. Analysts at J.P.Morgan Research said that gold prices could average around $1,520 by the fourth quarter of 2022.

Meanwhile, Georgette Boele, senior FX & precious metals strategist for the Dutch bank, said that she sees gold prices falling to $1,500 an ounce by the end of next year.

Wall Street analysts have no clear consensus regarding where gold prices will go next year. Many analysts have said that while the specter of rate hikes next year could weigh on gold prices, much of the bad news has been priced in.

Many banks see gold prices trading in a reasonably wide range between $1,800 and $2,000. The most significant factor to drive gold price in 2022 remains real interest rates. Although the Federal Reserve is looking to raise interest rates three times next year, many economists expect inflation to stay above 4%, which means real rates will remain deep in negative territory. Almost all economists predict that the Federal Reserve will remain well behind the inflation curve in 2022.

Among the bullish banks, Goldman Sachs is one of the most optimistic. In November, analysts said they see prices pushing above $2,000 an ounce by the end of the year.

Wells Fargo is also bullish on gold next year, looking for $2,000 an ounce as the precious metal plays catch up to the rest of the commodity complex. John LaForge, head of real asset strategy for Wells Fargo gold, will be sensitive to U.S. monetary policy in 2022; however, he added that it is unlikely the Federal Reserve will adopt overly aggressive monetary policies.

By Neils Christensen

For Kitco News

Buy Gold and Silver on Dips and earn monthly yields on holdings

David

Gold, silver see upside price corrections after recent steep slide

Gold and silver prices are moderately higher in early U.S. trading Tuesday, on normal upside price corrections after the sharp losses suffered last Friday and on Monday. The precious metals bulls appear to have stabilized their markets—at least for now. October gold futures were last up $7.40 at $1,731.80 and September Comex silver was last up $0.166 at $23.435 an ounce.

(By the way, I was on vacation last week—leading a Jeeping expedition across the U.S. Continental Divide high in the Rocky Mountains. It was a great adventure. I know I have a good job at Kitco when I really did not mind coming back to work this week to serve you, my valued Kitco reader!—Jim)

Global stock markets were mixed but mostly firmer overnight. The U.S. stock indexes are pointed mixed to weaker openings when the New York day session begins. Markets are quieter Tuesday morning, amid the summertime doldrums, when much of Europe is on holiday and many North American traders and investors are taking family vacations. Traders will be closely parsing speeches by a couple of Federal Reserve officials today, Loretta Mester and Charles Evans, looking for clues on the timing and direction of U.S. monetary policy—especially after last Friday's much-stronger-than-expected U.S. jobs report. Separately, reports this week say the Biden Administration generally supports appointing Fed Chairman Jerome Powell to a second term.

Germany's close watched ZEW consumer sentiment survey showed a drop for the third straight month, and to the lowest level since last November, as a rise in Covid infection rates raises concerns over a possible tightening of pandemic curbs. The ZEW economic expectations index fell to 40.4 in August from 63.3 in July, with the institute's president warning of "increasing risks" to the German economy. The index of current conditions improved to 29.3 in August from 21.9 in July.

The key outside markets today see the U.S. dollar index firmer and hitting a three-week high overnight. Nymex crude oil futures prices are higher on a corrective bounce from recent strong selling pressure and trading around $67.50 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.316%.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store sales reports, the NFIB small business index, and preliminary productivity and costs.

Technically, October gold futures bears have the overall near-term technical advantage amid the recent steep downdraft in prices. Bulls' next upside price objective is to produce a close above solid resistance at $1,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at this week's spike low of $1,676.40. First resistance is seen at $1,750.00 and then at this week's high of $1,763.00. First support is seen at $1,725.00 and then at $1,700.00. Wyckoff's Market Rating: 3.5

The silver bears have the solid overall near-term technical advantage. Prices are in an 11-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing September futures prices above solid technical resistance at $25.00 an ounce. The next downside price objective for the bears is closing prices below solid support at this week's low of $22.295. First resistance is seen at the overnight high of $23.675 and then at $24.00. Next support is seen at $23.00 and then at $22.75. Wyckoff's Market Rating: 2.5.

By Jim Wyckoff

For Kitco News

David