Gold and silver demand in India sees strong recovery in H2 2021; next year will be even better. Pent-up demand, as many weddings had been postponed in 2020 and H1 2021, the consultancy noted that lower gold prices have also supported higher consumer purchases.
Analyst View
FX Daily Senior Strategists see Q1 of 2022 Gold Fundamental Outlook Proves Mixed. The combined forces of elevated realized inflation in the short-term, met by central banks raising interest rates, and longer-term inflation expectations easing back, may prove to be too overwhelming to allow gold prices to sustain a significant rally.
FX and Central Bank Update
U.S. dollar in firm uptrend for 2022. The policy divergence between the ECB and the Fed has created significant bearish sentiment bias against the euro. The ECB still maintains there could be no interest rate rises in 2022, but there have been some members who have called for this if inflation rises materially above the 2% target for a sustained period of time. On the other hand, the market is pricing in rate rises by the Fed next year.
Stock market and Economic Update
November new home sales came in well below analysts expectations, down 14% from a year ago. The median price of a newly built home sold in November rose nearly 19% from November 2020, despite rising mortgage rates. The median price of a newly built home sold in November rose nearly 19% from November 2020, despite rising mortgage rates.
Chief economist at Pantheon Macroeconomics noted about US housing market that “A hefty correction appears to be due, but the rapid increases in existing home prices — inventory in that market is only one-third the level in the new home market, relative to sales — is putting extra upward pressure on new home prices”
Gains in Japan’s core consumer prices accelerated in November and would have hit the central bank’s 2% target without the impact of slashed mobile phone fees.
The world economy is set to surpass $100 trillion for the first time in 2022, two years earlier than previously forecast
Energy & Oil Update
Europe is paying record gas prices because of its failure to sign long-term supply contracts and could ease the pressure by ending delays to the Nord Stream 2 gas pipeline that runs from Russia to Germany. Europe’s benchmark gas price climbed to a new record on Tuesday, up almost 800% since the start of the year. The price eased on Friday but it was still up more than 400%.
Covid-related Update
U.K. data supports view omicron causes fewer hospitalizations, but also shows boosters wane.
US Airlines cancel more than 800 U.S. flights as Covid hits crews. Airlines ramped up pressure on the CDC this week to halve the quarantine recommendation for breakthrough Covid cases to five days.
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