Here, we outline four macroeconomic themes that remain at the helm for gold’s 2022 outlook. Based on these themes, our base-case outlook sees gold returning to long-term trend levels with a potential boost to the upside.
After posting 18% and 25% gains in 2019 and 2020, respectively, the gold price closed out 2021 with a slight negative return. 2021 has been a period of recalibration for gold — reverting towards longer-term trend levels among demand sectors, with the price seeking to consolidate at a new higher base.
For 2022, there are several reasons to remain optimistic about gold’s outlook. The continued battle against Covid-19 and new variants, disruptions due to supply bottlenecks, rising consumer and commodity prices, and monetary policy shifts point to the likelihood of higher volatility on the horizon. Particularly set against the backdrop of an ongoing global pandemic, these headwinds may prove beneficial for gold as it looks to resume its longerterm bull market, which commenced at the onset of the previous tightening cycle by the US Federal Reserve in December 2015.
