Higher interest rates to challenge gold in 2022
But real rates are likely to remain low in historical terms, and gold tends to perform better with high inflation
As central banks react to high inflation, higher interest rates are likely to reduce gold’s attractiveness in 2022.
Nonetheless, both nominal and real interest rates are likely to remain at historically low levels. And gold has tended to perform better during periods of high inflation.
New Covid-19 variants, and rising geopolitical tensions, are likely to continue to foster uncertainty among investors. This will boost the allure of safe haven assets, partly offsetting the negative effect
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