Seeking Alpha/Adam Hamilton/1-1-2022

“Gold’s turn to shine again is nearing, with major bullish drivers aligning heading into this new year. The Fed’s vast deluge of new money remains intact despite QE tapering, continuing to fuel raging inflation. A new rate-hike cycle to fight that is looming, but gold has thrived during past cycles. This Fed tightening will weigh heavily on QE-levitated bubble-valued stock markets. As they fall, gold investment demand will surge. Gold mostly spent 2021 grinding sideways-to-lower in a high consolidation. That lack of upside progress left this leading alternative asset increasingly out of favor with speculators and investors alike as the year marched on. Heading into year-end midweek, gold was down 4.9% year-to-date. While psychologically-grating, maybe big gains needed to be digested after gold surged 18.4% in 2019 then another 25.1% in 2020.”

USAGOLD note: We often read about investor rotation from one asset class to another, and sometimes those rotations begin as a trickle that ultimately turns to a flood. The World Gold Council reports record coin and bullion investment demand in 2021. The trickle before the flood? Much will depend on what 2022 brings to the table, but the strong on-going worldwide demand for precious metals implies an uneasiness among investors not likely to be easily placated.