Gold's Yearly Outlook 2022
Hi guys,
Welcome to 2022, the year where gold will make new all time highs. But (there is always a but) not before all bulls will be flushed out and the whole market will start turning bearish. There will be no free lunch and prices of below 1680 are possible. The bears set the tone for Q1 and they treated us with a strong engulfing bearish candle on the 1st trading week of the year.
⚠️ Start of new rate hike cycle
This year is a special year because it is expected that the FED will start a new hiking cycle in March 2022. Until that time, gold will remain in the claws of the bears and under strong selling pressure.
The most important day to write in your calendar is ofcourse January 26th, as Uncle Powell will treat us with a new monetary fireworks show. This FOMC meeting will be extremely important as Powell will reveal to the market when the first rate hike will happen and if the tapering will be accelerated again just like in the December meeting.
🐻 Bearish environment for Precious Metals
This is obviously a bearish environment for gold, since the strongest driver for gold is monetary policy (especially the FED's). I am expecting to see around $1725 near or after the next FOMC-meeting.
From that point we need to listen carefully to what the FED will tell the market. The market is pricing in a rate hike as early as March, immediately after the end of tapering. If Powell hints on a rate hike in March, gold will remain bearish until March and I am expecting to hit 1650-1675 by then.
💎 The Golden Magic
But then the magic happens. At a certain point the market will realise that there is no more cheap money. They actually now have to pay interest on their borrowed money. Which means plunging stocks, cryptos, commodities, you name it. And that is when gold will shine, as gold is an anti-cyclic asset.
If we may believe history, every new rate hike cycle was followed by a strong recession. Lucky for goldtraders, that is an environment where gold feels very comfortable. Recessions, war, conflict, pandemics etc are another strong driver for gold. I expect gold will turn mega bullish by summer 2022 and I am aiming for $2000 before end of this year. But not before 1650-1675 and not before the first rate hike.
❌ No rate hike scenario
If Powell surprises the market and not reveal plans for any rate hike in March, gold can jump to 1850 until the next FOMC in March with a possible test of 1900. This is a scenario that we need to take into account, and also technically still possible.
🔮 Cesaro's Crystal Ball
For the coming weeks leading up to 26th of January, I am expecting to see the 1775 horizontal support to be tested with a wick. From there we are most likely going to be ranging in a bearflag formation between 1775-1815, where the market will wait for the fundamental trigger to breakdown the bearflag towards 1725 or invalidate it and bulls move the price back to 1850. For now all shorts need to have SL's above the most recent lower high 1832.
Cheers,
Cesaro
Welcome to 2022, the year where gold will make new all time highs. But (there is always a but) not before all bulls will be flushed out and the whole market will start turning bearish. There will be no free lunch and prices of below 1680 are possible. The bears set the tone for Q1 and they treated us with a strong engulfing bearish candle on the 1st trading week of the year.
⚠️ Start of new rate hike cycle
This year is a special year because it is expected that the FED will start a new hiking cycle in March 2022. Until that time, gold will remain in the claws of the bears and under strong selling pressure.
The most important day to write in your calendar is ofcourse January 26th, as Uncle Powell will treat us with a new monetary fireworks show. This FOMC meeting will be extremely important as Powell will reveal to the market when the first rate hike will happen and if the tapering will be accelerated again just like in the December meeting.
🐻 Bearish environment for Precious Metals
This is obviously a bearish environment for gold, since the strongest driver for gold is monetary policy (especially the FED's). I am expecting to see around $1725 near or after the next FOMC-meeting.
From that point we need to listen carefully to what the FED will tell the market. The market is pricing in a rate hike as early as March, immediately after the end of tapering. If Powell hints on a rate hike in March, gold will remain bearish until March and I am expecting to hit 1650-1675 by then.
💎 The Golden Magic
But then the magic happens. At a certain point the market will realise that there is no more cheap money. They actually now have to pay interest on their borrowed money. Which means plunging stocks, cryptos, commodities, you name it. And that is when gold will shine, as gold is an anti-cyclic asset.
If we may believe history, every new rate hike cycle was followed by a strong recession. Lucky for goldtraders, that is an environment where gold feels very comfortable. Recessions, war, conflict, pandemics etc are another strong driver for gold. I expect gold will turn mega bullish by summer 2022 and I am aiming for $2000 before end of this year. But not before 1650-1675 and not before the first rate hike.
❌ No rate hike scenario
If Powell surprises the market and not reveal plans for any rate hike in March, gold can jump to 1850 until the next FOMC in March with a possible test of 1900. This is a scenario that we need to take into account, and also technically still possible.
🔮 Cesaro's Crystal Ball
For the coming weeks leading up to 26th of January, I am expecting to see the 1775 horizontal support to be tested with a wick. From there we are most likely going to be ranging in a bearflag formation between 1775-1815, where the market will wait for the fundamental trigger to breakdown the bearflag towards 1725 or invalidate it and bulls move the price back to 1850. For now all shorts need to have SL's above the most recent lower high 1832.
Cheers,
Cesaro
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