# Signals
Fat or Flat: Gold Price in 2022
Analysts' 2022 forecasts for the gold market are not overwhelmingly enthusiastic – they see it flat. However, maybe the opposite should be expected. The LBMA has recently published its annual precious metals forecast survey. In general, the report is neutral about gold in 2022. On average, the analysts forecast gold prices to be broadly flat this year compared to the year. The average gold price in 2021 was $1,799, and it is expected to rise merely $3 to $1,802. How boring! However, as the table below shows, the forecasts for other precious metals are much more bearish, especially for palladium.
Even Strong Payrolls Couldn’t Knock Gold off Its $1800 Perch
The latest employment report strongly supports the Fed’s hawkish narrative. Surprisingly, gold has shown remarkable resilience against it so far. What a surprise! The US labor marketadded 467,000 jobs last month. As the chart below shows, the number is below December’s figure (+510,000) but much above market expectations – MarketWatch’s analysts forecasted only 150,000 added jobs. Thus, the report reinforces the optimistic view of the US economy’s strength, especially given that the surprisingly good nonfarm payrolls came despite the disruption to consumer-facing businesses from the spread of the Omicron variant of the coronavirus.
Gold Plunged but Didn’t Knuckle Under to the Hawkish Fed
The FOMC set the stage for a March interest rate hike, which was an aggressive signal. Gold got it and fell – but hasn't capitulated yet. The Battlecruiser Hawk is moving full steam ahead! The FOMC issued yesterday (January 26, 2022) its newest statementon monetary policy in which it strengthened its hawkish stance. First of all, theFedadmitted that it would start hikinginterest rates“soon”:
Neither Inflation nor the Fed Moves Gold
Inflation spiked 7.1% in December, and the Fed is likely to raise interest rates already in March. Still, gold remains uninterested. “Inflation is too high,” admitted Lael Brainard during her nomination hearing in the Senate for the Vice Chair of the Fed. You don’t say, Governor Obvious! Indeed, the latest BLS report on inflation shows that consumer inflation rose 0.5% in December on a monthly basis, after rising 0.8% in the preceding month. The core CPI rate increased 0.6%, following a 0.6-percent increase in November.