$ 2,100 spot gold? Commodities analyst says gold could hit new highs this year

Gold could test new highs of $ 2,100 an ounce in 2022, according to Fat Prophets’ David Lennox.

The weakness of the US dollar and inflation are some factors that are likely to drive the price of the precious metal, he said.

Geopolitical tensions between major military powers could also drive gold prices higher than expected, Lennox said.

Gold could test new highs of $ 2,100 an ounce this year, according to a resource analyst with fund company Fat Prophets.

The weakness of the US dollar and inflation are among the factors likely to drive prices for the precious metal, David Lennox told CNBC’s Street Signs Asia on Monday.

“We think we’ll see gold price testing at all-time highs later in 2022, but we can’t see it going far beyond that once it gets there,” he said.

According to data provider Eikon, the gold price closed in August 2020 with a record value of 2,063 US dollars. In Asia, it was trading at around $ 1,814 an ounce on Wednesday morning.

Lennox said it looks like everything is for U.S. dollars to decline, although it has not yet done so. If the dollar weakens it will be a “boon” to gold, he added.

US inflation is now close to 6%, up about 1%, he said. Gold is considered a hedge against inflation and appreciation when the dollar falls, but its track record has been patchy in the past.

“We believe that high inflationary momentum and the fall of the US dollar will drive gold prices higher in 2022,” he added.

Above all, Russia’s military presence on the border with Ukraine has increased, and that is “a focus that could quickly turn into a disaster,” he said.

“If that happens, we would see the price of gold reacting pretty strongly and our … $ 2,100 per ounce [target] would likely get here sooner rather than later,” he added.

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