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JP Morgan is looking for a lower gold and silver price in 2022

Kitco News

Welcome to Kitco News' 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.

(Kitco News) - U.S. investment bank JP Morgan has updated their forecasts for precious metals this week. The bank has been pretty bearish as they are projecting gold at $1,630 in 2022 and silver to average $20.48.

The report said, "JP Morgan retains bearish bias for the prices for gold and silver during its latest forecast, projecting an average price of $1,630 per ounce for gold and $20.48 for silver in 2022.". They added the bank is "Expect rebasing higher in long-end U.S. nominal yields to weigh on gold over medium-term,"

Longer-term charts neutral-bullish for gold, but bulls have a potential ace

This would not be the first time yields have hampered the precious metal. This year the rise in yields following bullish comments by central bankers saw gold fall as investors rebalance their portfolios. There have been many calls for rate rises by analysts this year but with the rise of the omicron COVID-19 variant, some of those calls have been put into doubt.

As you can see from the weekly chart below the JPM forecast is pretty far from where the price is currently today. This would also mean the consolidation low would break to the downside. The current price of the yellow metal reflects the uncertainty surrounding Fed policy and the speed of the QE reduction and the rate rises. This week the market will get some clarity, as the FOMC meeting and policy announcement comes on Wednesday.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.