Post-Fed is the time for gold price to take the reigns, says Standard Chartered – by Anna Golubova (Kitco News – December 16, 2021)

(Kitco News) After the uncertainty around the Federal Reserve’s tightening plan has been cleared up, it is gold’s time to shine, according to Standard Chartered.

Gold managed to quickly recover its losses post-Fed announcement and make its way towards that elusive $1,800 an ounce level. This came in response to the central bank stating that it was doubling its asset tapering pace to $30 billion a month and was pricing in three rate hikes for 2022.

“Gold positioning was relatively cautious ahead of the meeting and price action suggested that a number of headwinds were already priced in,” said Standard Chartered precious metals analyst Suki Cooper. “Gold had likely priced in the likelihood of accelerated tapering given its sensitivity to high inflation prints.”

The fact that a more aggressive Federal Reserve was already priced is what makes Thursday’s rally make sense. “Gold prices tend to start firming after the first rate hike in a hiking cycle or tapering announcements as, historically, the market prices in such a move early,” Cooper said.

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