10 reasons to be bullish the gold complex in 2022

1.10.22 - What Is the Great Reset?

Gold last traded at $1,801 an ounce. Silver at $22.51 an ounce.

NEWS SUMMARY: Precious metal prices steadied Monday despite rising interest rates and a firmer dollar. U.S. stocks fell, extending a rocky start to 2022 for equity markets as the 10-year Treasury yield moved above 1.8%.

KITCO--"With bearish gold headlines making the rounds as the new year came to a close last week, you would think bullion was down double-digits in 2021. But after gaining a stellar 18% in 2019, then another 24% in 2020, the gold price consolidated those huge gains as much as 20% by Q2/2021 and ended last year down just 3.5%....

On Thursday, St. Louis Fed President James Bullard said the Fed could raise interest rates as soon as March and is now in a "good position" to take even more aggressive steps against inflation, as needed, after a policy reset last month....

Despite the continued under-performance for gold as we begin the new year, the fundamental backdrop in 2022 for precious metals and related mining share prices continues to strengthen.

Below are 10 reasons why I expect the gold price to eventually rise above $2,000 per ounce in 2022, along with the mining sector creating a significant bottom in Q1/2022:

1) Inflation has become increasingly problematic and more persistent than previous sanguine assessments by Federal Reserve Chairman Jerome Powell and other Fed officials.

2) Real interest rates are expected to remain deeply negative. Higher inflation combined with continued low interest rates should ensure negative real rates, always a strong buy signal for gold investors....

3) The Federal Reserve's more aggressive tapering and the expectation of three rate hikes in 2022 have already been largely priced in....

4) Geopolitical fears include the ongoing threat of war between North and South Korea that would draw in the United States; tensions between the U.S., China and its neighbors over Taiwan....

5) The global economy is beginning to sputter. Spreading economic weakness will make any tightening moves by central banks difficult to implement without broader repercussions....

6) During the last tightening cycle, between late 2015 and 2019, the Federal Reserve raised interest rates nine times and gold prices rallied nearly 35%. And between 2004 and 2005 the U.S. central bank raised rates 17 times and gold prices rallied 70%....

7) Physical gold buying centered in India and China has risen dramatically....

8) Net buying of gold bullion by central banks is likely to continue and may possibly increase....

9) Positioning by commodity traders is at negative extremes and is usually followed by short-covering rallies....

10) Gold mining equities are trading at deep value while generating record cash flow."