Click Fraud
  • FAQ
  • Cart
ABC Bullion

Will 2022 be good for gold?

23 December 2021

Santa brings a gold rally

Thursday 23 December 2021

In this week's market report:
  • Santa brings a gold rally 
  • Will 2022 be good for gold? 
  • Central banks bullish on gold 
  • Silver bounces and investors rush in 
  • Inside our office this week 
  • Before you go… 
Shae Russell
Shae Russell,
Group Communications Manager

Dear Investor,

US dollar gold price [XAUUSD] Daily chart

Santa brings a gold rally: Gold popped overnight, up 0.26% to US$1,804 at the time of writing.

Consolidation over? The early December consolidation phase for gold may be over.

Bulls, 1800 is a good sign: Getting within a whisker of US$1,815 (intraday high on 17th Dec) is bullish.  
  • As mentioned last week, reaching US$1,811 per ounce was important.
  • Another run up at the US$1,830 level suggests the bulls are out for a run.
Will the bears wrestle gold back down? Perhaps, though it’s worth noting that if there is a sudden push south it could be more a of a liquidity issue, rather than a fundamental one.
  • Markets grow quiet this time of year as there are less traders around.
  • Being knocked down to US$1,780ish over the Christmas/New Year period is possible.
Precious metals rally: All precious metals were up just in time for Christmas.
  • Silver is up 1.44% to US$22.80 per ounce.  
  • Platinum is higher by 3.8%, with a very strong rally overnight to US$966 per ounce.
  • Palladium also did well, up 8.7% to US$1,878 per ounce.
Locally, Australian gold prices are steady at AU$2,500: The Australian dollar has risen this week to 72.12 US cents at the time of writing. This 0.48% jump in our currency has muted spot gold’s gains, with the Australian gold price steady at AU$2,500 per ounce.

Will 2022 be good for gold?

Yes…and no. Major banks are coming out with bearish forecasts for gold, suggesting spot gold may be pushed back into the US$$1,600s by the end of 2022. Their thesis is largely driven by the Federal Reserve Bank increasing the pace of tapering and the plan to hike rates three times next year, and again in 2024.

No doubt the Fed’s moves in 2022 will put pressure on gold. Nonetheless gold benefits from negative real rates (the inflation rate minus the nominal interest rate). With the US experiencing high inflation prints in the 5s and 6s — expected to remain like this into early 2022 — and even with tightening commencing as early as 2022, negative real rates are likely to persist for most of next year.

A strong US dollar will put pressure on gold, but negative real rates will be supportive for the yellow metal. As discussed here, gold could surprise to the upside next year.

Central banks bullish on gold

Central bank purchases of gold may have slowed down since 2015, however this year marked the start of a different trend.

While CBs have been net buyers of gold for over a decade now, this year we saw developed markets re-emerge as buyers of gold.

Since 2014 most central banks buying gold have come from emerging economies, yet 2021 saw developed economies increase their gold purchases, with countries such as Ireland and Singapore adding to their holdings this year.

Silver bounces and investors rush in…

Silver bounces and investors rush in…but will the rebound last?

Ag has struggled to recover from it’s November plunge, where the precious metal lost 11% in the second half of the month. This fall kept silver below its 200-day simple moving average (SMA) and then pushed it below the 50-day SMA as well.

With silver heading north again, the question is, will this rally hold?

Silver may face resistance around this level over the Christmas period, but as long as spot silver remains above US$21.50 per ounce we can be bullish.

Inside our office this week…

Silver is our hero metal this week! I had a quick chat with our incredible dispatch team this morning, and silver has been so popular our silver coins have sold out and are now available for pre order. In addition, I’m our 5kg ABC Bullion Silver Cast Bars and 10oz ABC Bullion Silver Cast Bars are literally flying out the door…
Also, have a look under your Christmas tree on Saturday morning, and tell me if you’re one of the lucky ones being gifted gold. Our 1g ABC Bullion Gold Minted Tablets are now back in stock, and there’s been a few whispers they’re Christmas presents

Before you go…

We close out the year with some very exciting news for the 2022. Our secure vaulting solutions are coming to Perth! Custodian Vaults — our sister company — operates a discreet and highly secure private vaulting service in Sydney. As of the first week of February Custodian Vaults will be opening their doors to a new facility in Perth.

They are currently accepting reservations for the safety deposit boxes within the new Perth facility. If you would like to be one of the first to reserve a box with Custodian Vaults click here to see prices and size options.
New location

One more thing…

Before I wrap up today, a friendly reminder about our open and closing hours.

Our branches around Australia will close at 1pm, Friday 24th December (tomorrow), and reopen on Monday 10th January 2022. Our online trading platform is available 24/7 and will operate throughout Christmas and the New Year period.

In addition, this is our final market update for 2021. Your weekly precious metals market update will resume on Friday 21st January 2022.

On behalf of everyone here at ABC Bullion, allow me to wish you and your family a very Merry Christmas and happy New Year. May you enjoy your break and spend time with your loved ones.

Until next time,
Shae Russell
Group Communications Manager, 
For ABC Bullion