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UBS forecasts weaker gold prices for 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) - Dominic Schnider, UBS wealth management, head of commodities & APAC FX and macro gave an interview about this take on commodities and the global commodities index.  He said "demand has been robust in the developed world, that's the main story"

He continued by saying "global growth will be above trend in the 1st Q this year. The supply side (in commodities) is still challenged" and we "could see a 10% increase in the broader commodities indices this year". Elsewhere "A driver in commodities sector could be that in world is yield starved". On Base metals, he noted that they are under-supplied and copper could head toward $11.500/lb. 

When speaking about nickel, despite the Indonesian government tax hikes Schnider believes the supply side is getting stronger and this could curtail some of the momenta. 

However, the Swiss investment bank is still bearish on gold, "the dollar could be strong and this means gold could be weak" in 2022. There are a few nuances that Schnider picks up for the theme of the stronger dollar. Portfolio directions are still positive for the dollar and negative for the Euro. Elsewhere, the  Fed vs ECB trade still remains important as the ECB could stick to its ZIRP and QE policy for some time to come. He added he still expects EUR/USD to head to 1.10.

Retail Investor see gold hitting record highs above $2,000 in 2022

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.