The fourth-largest bank in the world, Wells Fargo, said that gold's price will reach $ 2,100 per ounce by the end of the year. Gold could turn from the worst asset of 2021 into one of the best assets this 2022.
According to Wells Fargo's updated gold forecast, the precious metal will shine this year.
The investment strategy analyst of this company, Austin Pickle, noted that some of the main obstacles to gold prices last year were the massive risk appetite in the US stock market, growth of the US dollar, and the idea that the increase in inflation is temporary.
Nevertheless, one of the main changes this year is the idea that the profitability of risky assets will now be limited or even threatened since the US stock market already looks much worse after the January collapse.
Austin Pickle emphasized that due to higher market volatility, the profitability of risky assets is likely to be volatile this year. This may lead investors to the usual safe-haven asset.
On top of that, Wells Fargo's USD forecast suggests that the dollar's pressure on gold will weaken.
According to the forecast, these macroeconomic developments are likely to boost gold purchases throughout the year. Wells Fargo believes the precious metal will be worth between $2,000 and $2,100 by the end of the year.
The analyst said that risks remain, including the possibility of raising interest rates. However, if gold managed to break the technically and psychologically important level of $1,900, one would expect 2022 to be a very good year for gold. The bank has long positions in gold at the end of the year with a target of $2000-2100 per ounce.