The latest precious metals forecast from Haywood Research paints a compelling picture for gold thanks to an upgraded forecast and confirmation of its strength during current economic uncertainty.
Analysts confirm gold is in a bull phase, with global market uncertainty likely to fuel price increases through the end of the year. They said, “Gold remains a tangible, fungible, and durable product and store of value. We believe the precious metals complex is in a long-term uptrend and the recent breakout from the recent March 2021 lows supports this view, while ongoing longer-term macro-economic factors remain constructive.”
The forecast also suggests gold will remain bullish in the long term thanks to Federal Reserve policy, with interest rates expected to stay below the rate of inflation. That gives gold further momentum and could see notable gains if history serves us right. The report adds, “In order to control inflation, rates would need to rise, but that, in turn, increases interest on U.S. debt, driving the deficit even higher.
“While the FOMC has said inflation is transitory and expected to recede, last year’s move to ‘average inflation targeting’ allows the Fed to keep interest rates below inflation for a longer period of time.
“According to the World Gold Council, in years when the U.S. Consumer Price Index [CPI] was higher than 3%, gold had an annual average return of 15%.”
With the latest CPI data reporting 5.4%, now is an optimum moment to increase gold holdings.