CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
empty
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

29.12.202108:58 Forex Analysis & Reviews: Dark times are predicted for gold – is it worth saying goodbye to it now?

Long-term review
This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 29.12.2021 analysis

On Tuesday, gold reached a one-month high, but could not stay at the peak. Experts consider this indicative: bullion does not have strong support, and they are waiting for an imminent fall.

Last week, concerns about the new COVID-19 strain served as a springboard for gold. However, at the beginning of the current seven-day period, they have significantly decreased, as more and more experts are inclined to believe that omicron is softer than previous versions of coronavirus.

Oxford University immunologist John Bell said that the new strain is not "the same disease that we observed a year ago," because even those patients who are now in the hospital spend much less time there. According to the expert, this once again confirms the opinion about the softer nature of Omicron.

Optimism that the new strain, despite its high contagiousness, does not pose a serious threat to global economic growth, has put strong pressure on the safe-haven asset.

During yesterday's trading, gold prices peaked at $1,821.60. This is the highest intraday value in 5 weeks. The jump in quotes provoked a decline in the yield of US government bonds, which fell to 1.48%.

Meanwhile, the dollar, on the contrary, showed positive dynamics amid expectations that the US Federal Reserve may raise interest rates as early as March to counter rising inflation. The green currency index rose 0.1% to 96.195 points on Tuesday. A stronger greenback also forced gold to retreat from the intraday high.

Nevertheless, the yellow asset ended the session on the New York COMEX Exchange with an increase. Bullion rose slightly – by only 0.1%, or $ 2.10 dollars. The final mark was $1,810.90.

Analyst David Meger predicts that in the near future the precious metal will continue to trade in a sideways trend, which has been observed on the market since November. In his opinion, consolidation will be supported by increasing inflationary pressure.

On the one hand, rising prices can increase the investment attractiveness of a protective asset. On the other hand, there is a possibility that another surge in inflation will force the Fed to accelerate on the way to raising interest rates, which is negative for gold.

Currently, most analysts believe that the situation of precious metals will worsen next year, as the US central bank will take measures to combat inflation fairly quickly by raising interest rates.

Recall that at the December meeting, Fed officials announced 3 possible interest rate hikes in 2022. The first stage will begin immediately after the regulator curtails its bond purchase program.

"When interest rates rise, the opportunity costs of owning gold also rise, which ultimately leads to a decrease in its price," said analyst Naim Aslam.

The expert suggests that the weakening of coronavirus risks, which is observed at this stage, may push the Fed to force events. In this case, gold faces gloomy prospects.

According to analyst Giovanni Staunovo, by the end of 2022, against the background of rising interest rates, the value of the yellow asset will collapse to $ 1,650. However, at the beginning of the coming year, prices will remain at the current level.

�lena Ivannitskaya
Analytical expert of InstaForex
© 2007-2025

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.
Widget callback

Turn "Do Not Track" off

🍪 We use cookies

We may place cookies for analysis of our visitor data, to improve our website and measure advertising performance. Overall this data is used to provide a better website experience. More information

 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of Instant Trading EU Ltd including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.