Gold still has considerable upside left in the early part of 2022, in the view of strategists at TD Securities. Jerome Powell is no hawk and will keep rates low for longer to achieve full employment, with economic data driving decisions.

XAU/USD to jump into the $1,875/oz territory in the first half of 2022

If data is lackluster, which looks likely due to less liquidity and the waning positive fiscal stimulus impact, Fed Chair Powell most likely will continue signaling a dovish policy tilt for much of 2022. This is a positive for gold.” 

“Post-COVID normalization may well increase the labor participation rate over time. The hope is that the resulting higher potential growth, and the lower non-accelerating inflation rate of unemployment, may all leave the US central bank comfortable keeping the economy running hot for longer. The best case for gold is high, but decelerating inflation.”

“Political risks associated with the pending US mid-term elections, US fiscal drag, fairly steadfast central bank gold purchases, and a significantly slower pace of US and global recovery, are additional factors which may see investors rekindle their interest in gold. These factors should help lift gold into the $1,875/oz territory in the first half of 2022, as per our projections.”