Axel Merk, President of Merk Investments, believes gold will perform well in the coming months. He told Kitco News that he thinks the precious metal will remain an attractive asset regardless of what the Fed does with monetary policy in 2022 — especially when interest rates rise. The yellow metal has had a positive start in the new year. Reuters reports a retreating U.S. dollar helped gold prices hold near a more than one-week high Friday morning.

 

Kitco News/Neils Christensen
Gold is in a good place no matter what the Fed does in 2022 – Axel Merk

With gold prices holding above $1,800 an ounce, the metal is building a solid foundation for the new year, and according to one fund manager, the precious metal remains an attractive asset no matter what the Federal Reserve plans to do with monetary policy.

In a telephone interview with Kitco News, Axel Merk, president of Merk Investments, said that he expects gold to weather expected rate hikes as a risk and inflation hedge.

“Gold should continue to do just fine as real interest rates will remain in negative territory,” he said. “When I look at inflation protection, I am not looking for the next meme stock; that is no inflation protection. If rates were to move higher, then the ‘funny season’ may be over. And some of the meme stocks and other phenomena might deflate.”

You can read the entire article, here.

 

Reuters via CNBC
Gold holds near 1-week high on struggling U.S. dollar

Gold prices were holding near a more than one-week high on Friday, supported by a retreating U.S. dollar and lower Treasury yields as markets awaited economic data to gauge the pace of upcoming U.S. rate increases.

Spot gold was steady at $1,821.60 per ounce by 1228 GMT, after earlier reaching a week’s high of $1,828.92. U.S. gold futures were up 0.1% to $1,822.80.

Bullion has risen by about 1.4% so far this week, the most since Nov. 12.

“The fact that the U.S. inflation numbers weren’t as high as people were thinking, might be in gold’s favor,” said Michael Hewson, chief market analyst at CMC Markets UK, adding that a weaker dollar and falling yields for the week have helped push gold higher.

Read the full story, here.

 

Associated Press/Edith M. Lederer
UN forecasts lower global economic growth for 2022 and 2023

The United Nations forecast lower global economic growth for 2022 and 2023 on Thursday, saying the world is facing new waves of coronavirus infections, persistent labor market challenges, lingering supply chain issues and rising inflationary pressures.

The U.N. said that after expanding 5.5% in 2021 — the highest rate of global economic growth in more than four decades — the world economy is projected to grow only 4% in 2022 and 3.5% in 2023.

Liu Zhenmin, the U.N. undersecretary-general for economic and social affairs, said at a news conference releasing the economic report that two years after the start of the COVID-19 pandemic “we are still living in a time of great uncertainty.”

“At the start of 2022, the global economic picture in the market is still murky,” he said. “Job creation has not yet made up for the earliest losses with the employment deficits disproportionately affecting women and youth. At the same time, the spread of a new COVID-19 virus, supply challenges, rapidly rising inflation in many parts of the world, and the looming debt challenges are clouding the economic outlook.”

You can read the full story, here.

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