Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store


Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

69.21% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

Will 2022 be the year of gold or the US dollar?

Will 2022 be the year of gold or the US dollar?

Information is not investment advice

Two issues will determine who will have the upper hand in 2022: gold or the US dollar.

The first is the Fed's strict schedule for ending its monthly bond-buying program and the possibility of it raising interest rates twice during 2022. But, on the other hand, we have the rising inflation that's starting to spiral out of the Fed's control.

Gold Outlook: What will drive gold in 2022?

Gold has strong drivers next year that may enable it to regain the bullish trajectory after consolidating since reaching its highest levels in August 2020.

1. Inflation

The dollar's strength in the face of expectations of rate hikes has been one of the obstacles to gold this year. Now, we must accept that inflation will not fall as quickly as the markets expect. Even if inflation is transitory, it will stick for longer than expected until circumstances return to normal and the shortage of workers and supply chains problems end.

Next year's main drivers for gold will be the negative interest environment, expectations of high inflation, and a weaker dollar in the first half of 2022.

 2. Low-interest rates

Gold will benefit from negative real interest rates, which will not disappear even as the Federal Reserve ends its bond-buying program and raises rates twice next year.

Low-interest rates will remain a natural supporter for gold in the first half of 2022. In the coming year, the expected increases by central banks will not be enough to turn real rates positive. If the interest rate is raised twice as expected, it will remain low at 0.25% - 0.5%.

Compared to the current business cycle to previous cycles, the inflation figures are much higher and appear to be lasting. This should keep real interest rates in negative territory in 2022. The possibility of persistently higher inflation will increase hedging investments in gold in the short term.

3. Higher Lows and Bottoms

On the price action side, the general trend for gold appears to be bullish during 2022, as investors see higher lows in the longer term.

The trend of gold in the recent period forms higher bottoms every time it falls. If the inflation crisis worsens globally, this will undoubtedly support the surge of gold.

Gold consolidated since reaching its highest level in August 2020. If you watch the lows recorded by gold since 2018, you will see that these low levels gradually rise. This refers to a bullish trend.

4. Correction in the stock market

When Fed starts raising rates, volatility will increase in the US stock market. For example, the largest correction of the market in 2021 was 5%. Therefore, we may see a bigger correction next year, especially with some stocks already being overvalued. 

With growing volatility, some funds and liquidity may escape from the stock market to gold. Despite rising inflation, the strength of earnings and profits in stocks have attracted investors and snatched them from safe gold investments. 

5. Higher physical demand for gold 

Next year, the physical demand for gold is expected to rise with demand for jewelry rising by 5% year-on-year to 1920 tons, and central banks purchases within 480-500 tons.

The dollar is waiting for the second half of 2022

Gold will find support in the first half of next year as low rates and higher inflation proceed but will be met with bearish pressure later in the year when the Fed hike rates. 

As the ultra-loose monetary comes to an end and withdrawing the cheap money from markets, the support of the precious metals sector will drop in the second half of 2022. This support will go to the US dollar. 

In the end, several factors, including labor shortage and higher energy prices, have pushed inflation in the United States to its highest level in 40 years. However, gold didn't jump to historical levels as expected. This may make us believe that markets believe the Fed's narrative on transitory inflation and that it will control it. 

This is why gold has failed to take advantage of inflation. In addition, as the stock market continues to achieve record levels and substantial profits, investors prefer to put their money in a place they can get higher returns. Now, let's see if this changes in 2022.


Gold isn't saving investors from inflation

Many investors treated gold as a protection against inflation. However, last week, gold lost its major support and dropped despite rising inflation. Why did it act like this?


How Will BoJ Meeting Affect the Yen

Hold onto your hats, folks! The Japanese yen took a nosedive after the Bank of Japan (BOJ) left its ultra-loose policy settings unchanged, including its closely watched yield curve control (YCC) policy. But wait, there's more! The BOJ also removed its forward guidance, which had previously pledged to keep interest rates at current or lower levels. So, what's the scoop? Market expectations had been subdued going into the meeting, but some were still hoping for tweaks to the forward guidance to prepare for an eventual exit from the bank's massive stimulus

Choose your payment system


Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later