The gold market finds support around $1,800. However, according to a market strategist, the gold market faces renewed competition for the remainder of the year as the Federal Reserve aggressively raises interest rates.
“Gold will continue to struggle through 2022”
US Bank Wealth Management senior investment strategist Rob Haworth said in an interview that even though inflation has peaked, core He says there are indications that inflation will remain high until 2022, creating a challenging environment for the economy and financial markets.
In the current environment, Rob Haworth states that real assets continue to be an attractive hedge against inflation and market volatility, making the following assessment:
We have already seen significant multiple compressions in the stock market and that means we have to look for ways to drive our cash flows forward, and real assets have been a key way we do that.
However, Rob Haworth adds that he does not see gold as an attractive real asset. The veteran analyst predicts that gold will continue to struggle through 2022 as the Federal Reserve seeks to potentially raise interest rates to 3% by December.
“The only thing that can reverse the bear trend of gold…”
As you can follow from Cryptokoin.com news, USA The central bank has signaled that it may raise interest rates by 50 basis points in the next two weeks, and markets are pricing in a 50 basis point move potential in the next three meetings. Rob Haworth states that if inflation remains stable, rising nominal interest rates will mean that real interest rates will start to rise even more, and he makes the following predictions:
If we consider the last three years, one of the things that has helped gold has been negative real interest rates. We don’t have a full curve in the positive region, but now we’re starting to see some positive real interest rates. This will begin to undermine some of this demand. Investors looking for a safe haven can now find this in some bonds.
The veteran analyst states that the only thing that can reverse the current bear trend of gold is if the Federal Reserve has to halt or even reverse its current monetary policy plans.
