BofA Foresees Gold Price Averaging at $1,925/Oz in 2022

SEATTLE (Scrap Monster): The latest market research report published by the Bank of America (BofA) says that gold prices are likely to average at around $1,925 per ounce during the current year. The gold price rally is expected to persist despite macro challenges.

According to Michael Widmer, Analyst and Lead Author, BofA, the critical price drivers of gold would be yields and the dollar. The resilient investment flows will also offer support to the yellow metal prices. Gold has disconnected from its traditional drivers, Widmer said in the bank’s Global Metals weekly report.

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BofA noted that tighter monetary policy may not be a quick solution to tame the high inflation rate of 7%. The risks of a policy mistake coupled with rising volatility in global equities are likely to boost the appeal of safe havens including gold. The drop in bitcoin and crypto assets will obviously support robust gold inflows.

Moreover, gold market trends will be heavily dependent on emerging market central banks, which have become net gold buyers in recent years. The recent crypto fiasco in El Salvador will trigger further gold addition by more central banks. It has become a hedge not only for investors, but also for emerging market central banks.

BofA anticipates increased support for gold, mainly due to flaring up of geopolitics, which may in turn lead to rising global imbalances in future.