Gold prices rose to $1,817 per ounce early Wednesday as stocks stalled after opening higher in 2022
Inflation and a weaker dollar could see gold rise to $2,100 per ounce earlier than expected
Gold prices reached a record high of $2,063 in August 2020.
Spot gold is likely to rally to $2,100 per ounce in 2022, commodities analyst David Lennox has predicted.
Lennox, an analyst at fund management firm Fat Prophets, believes factors contributing to the bullish case for gold would be the rising inflation and a weaker dollar.
The analyst said this during an interview with CNBC’s “Street Signs Asia”, at a time the price of the precious metal is seeking a fresh upside after slipping from recent highs above $1,821.
High inflation and weaker US dollar to aid gold prices
About how far gold price will rise in 2022, the Fat Prophet analyst thinks it could test the all-time highs, though he adds that prices are unlikely to extend further from the peak.
He notes that two of the foremost factors that could aid gold in the year are a decline in the US dollar and inflation woes. In his view, a weakness in the dollar could be a boon for the precious metal, with further sparks provided by inflation fears that drive investors into safe-haven assets.
Geopolitical tensions could accelerate gains in gold
But it’s not just the above two factors that the analyst is looking at. He believes that a spike in geopolitical tensions and confrontation between the US and China or Russia is another potential driver of a fresh rally in gold prices.
According to him, if these scenarios play out, for instance, a military confrontation arising from the Russia-Ukraine tensions, would quickly add to the upside pressure in gold.
The target of $2,100 per ounce would likely then, be seen far much earlier in the year than widely projected.
Gold’s record high is $2,063 per ounce
At the moment, gold is priced around $1,817.10 per ounce, up about 0.14% on the day. The minor gains come even as the Dollar index continues to struggle against the major global currencies, currently down against the Japanese yen, the Sterling, and the Euro.
Last year, gold prices reached highs near $1,959 per ounce, with the 52-week high coming in a year the precious metal opened around $1,677 per ounce. But despite the gains, gold still closed below its record highs of $2,063 reached in August of 2020.