“The dollar exchange rate peaked in March 2020 just after the outbreak of the coronavirus crisis around the world. When asked what is more likely to reach a new high - gold or the dollar - I would answer: gold. I am currently neutral towards the dollar. In a way, this means that he will continue to stay in his usual range. But I still adhere to the “bullish” attitude towards the yellow precious metal, "- said the expert.
Unlike the US dollar, gold has a solid head start for the coming 2022 and could hit new all-time highs following consolidation following the August 2020 record highs, Hayes said. “As long as this environment persists, gold is likely to aim for new all-time highs. This means that there will no longer be a better time for the US dollar than now. "
In addition, the US dollar will face stronger competition from the euro next year, he said. The European Central Bank is likely to maintain a resource adaptation regime while the eurozone economy recovers from another variant of the coronavirus, he said.
Gold, among other things, will benefit from rising inflation, he said. “The trend in the market is aimed at the growth of the minimums of the precious metal price. And if inflation really begins to manifest itself more globally and turns out to be more stable, this could support a long-term upward trend in gold prices, ”said the financial expert. “Gold has been consolidating since hitting new all-time highs in August 2020. And if you look at the lows since 2018, they were higher lows, which in turn indicates an uptrend. "
According to Hayes, gold should benefit from negative real interest rates, which will persist even if the Fed completes full stimulus and raises rates twice in the next 2022.