Gold is in bear territory, but prices to rally back to $1,900 next year: ING – by Anna Golubova (Kitco News – September 27, 2022)

(Kitco News) The gold market faces more losses as the Federal Reserve is still in the midst of its historic rate hikes. But once signs of a potential Fed easing emerge, the gold price will return to its rally mode. And that is expected as soon as next year, according to ING’s latest outlook.

Gold is now down more than 10% year-to-date — a disappointing return for those using gold as an inflation hedge. December Comex gold futures were last at $1,637.40 an ounce, up 0.24% on the day.

“Given the amount of uncertainty at the moment coupled with high inflation, many in the market may have thought gold prices should be well supported. However, this has not been the case. Spot gold is trading at its lowest levels in more than two years and has fallen more than 20% from its recent peak in March, pushing it into a bear market,” ING’s head of commodity strategy Warren Patterson said Tuesday.

Yet, most of this year’s losses are due to the U.S. central bank’s aggressive policy tightening, which has triggered a strong rally in the U.S. dollar. The U.S. dollar index has been trading near 20-year highs throughout the summer and September. With those drivers still ongoing, more pain is in store for gold.

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