Gold Prices in 2022
Inflation, interest rate hikes, political issues, and much more uncertainty have plagued 2022—all of which can have a direct impact on gold prices. For investors, this means the price of the gold they own goes up and up, which is good news. But does that make it good news for people who want to invest and get in the game now? Yes! Although gold prices are rising, the best time to invest in gold is right now. Keep reading to learn more about gold prices in 2022 and what the outlook is like going forward.
What Influences the Gold Prices
Gold prices are on the rise in 2022, and there are many factors influencing the price of gold, including:
- Federal bank reserves
- The value of the US Dollar
- Supply of gold
- Demand for gold
- Investor behavior
There are many different ways to invest in gold, and each way has its own set of influences as well. For example, if you invest in gold coins, you will see that some coins can be more valuable than others. This is due to the rarity and demand for the coin, which will drive up the price. If you invest in gold bars, the more pure your gold is, and the more beautiful your bar is, the higher the price you may receive for your gold bar.
Gold Prices: What the Experts Say
According to Gold.org, gold investors face a challenging environment during the second half of 2022, needing to navigate rising interest rates, high inflation, and resurfacing geopolitical risks. In the near term, gold will likely remain reactive to real rates, driven by the speed at which global central banks tighten monetary policy in an effort to control inflation. Yet, in our view:
- rate hikes may create headwinds for gold, but many of these hawkish policy expectations are priced in
- concurrently, continued inflation and geopolitical risks will likely sustain demand for gold as a hedge
- underperformance of stocks and bonds in a potential stagflationary environment may also be positive for gold.
They continue that gold finished H1 0.6% higher, closing at US$1,817/oz.1 The gold price initially rallied as the Ukraine war unfolded, and investors sought high-quality, liquid hedges amidst increased geopolitical uncertainty. But gold gave back some of those early gains as investors shifted their focus to monetary policy and higher bond yields. By mid-May, the gold price had stabilized in response to the tug of war between rising interest rates and a high-risk environment. The latter was a combination of persistently high inflation as well as likely support also from the extended conflict in Ukraine and its potential knock-off effects on global growth.
Gold Prices: What is the Outlook?
In an article by Kitco, Metals Focus does see a limited downside for gold as the precious metal will continue to outperform equity markets.
Central banks bought 19.4 tonnes of gold in April, remain net buyers in 2022 – WGC
“With economies slowing and inflation stubbornly high, the risk of stagflation is growing, while other systemic risks abound. This should continue to encourage many investors to diversify into gold, especially as its price corrects and encourages bargain hunting,” said Meader. “Against this we expect to see double-digit declines for equities, high yield bonds and very possibly also investment-grade bonds.”
Looking at gold’s fundamental outlook, Metals Focus expects the precious metal’s structural surplus to increase by 37% this year. The increase will be driven by a 2% drop in demand as the COVID-19 lockdowns in China continue to impact jewelry and physical bullion demand. At the same time, relatively high prices will increase supply by 2%, with both mine production and recycling increasing.
Investing in Gold with Priority Gold
Gold prices are on the rise, which means the best time to invest in gold is right now. There is a large amount of economic uncertainty happening with rising interest rates and inflation without rising wages to match them. As such, you need something to protect yourself and your savings, such as gold. There are many ways to invest in gold—whether you are a seasoned investor or a first-timer. Gold coins, gold bars, precious metals IRAs, and much more are things to consider.
If you are ready to invest in gold to protect your savings and secure your future, we can help. We can help you with your investing goals and help guide you along the process, whether you are a first-timer with little knowledge about investing in gold or not. Priority Gold is one of the most trusted precious metals dealers in the United States with a BBB A+ Rating, AAA Rating with Business Consumer Alliance, and 5 Stars Rating with TrustLink.
We specialize in providing precious metals investment services with Security, Liability, and Great Convenience for customers. Our team is committed to helping to streamline their precious metals purchases at a fair price, selecting the right precious metals portfolios, and meeting their important financial objectives.
We offer Free Storage for qualifying Gold & Silver IRA accounts, a fast & easy gold buying process, and smooth IRA Transfer. And gold shows up on schedule. Priority Gold guarantees the highest customer service standards, including honesty, professional conduct, and an Ethical Code of Business.
For more information, visit us at prioritygold.com