Here, too, the Corona crisis plays an important role. Because in order to support the economy, central banks around the world have massively lowered interest rates as well as taken other measures to "pump money into the market". As a result, interest rates in Europe and the US are in the 0% range.
This means that it is very unattractive to save money. Consequently, a lot of capital is flowing into the stock markets. This also explains the strong price movements in 2020 and 2021. However, low interest rates also have a major disadvantage. They can lead to inflation.
Rising interest rates due to inflation
In the meantime, inflation rates around the world continue to rise. This is true in Europe as well as in the USA and China. In the meantime, they are around 5%. This is a lot, considering that central banks generally aim for a rate of 2%. Many products are therefore becoming more and more expensive. In order to stop inflation, there is only one possibility: interest rates have to be raised. This is expected to start in 2022.
All in all, this is bad news for the stock markets. Because less money tends to be invested in shares via Exness bonus is a reward for clients. In addition, higher interest rates make it less attractive to borrow. This in turn has the effect of reducing demand for products: companies will therefore tend to turn over less.
However, it can take quite a while before a change in interest rate policy becomes visible on the markets. It is therefore possible that the rally on the stock markets will continue for quite some time.
Forecast 2022 for currencies
Interest rates also have a big impact on currencies. For example, if the European Central Bank decides to lower interest rates, this will cause the euro to weaken. In 2022, the US Federal Reserve will most likely start raising interest rates. This will strengthen the US dollar. In the past, it has often been shown that a strong US dollar is bad for the financial markets.
Among other things, assets that are quoted in US dollars are burdened. These include in particular:
- Cryptocurrencies
- Gold
- OilÂ
A strong US dollar is also negative for the US economy. For this reason, the US Federal Reserve can be expected to raise interest rates only cautiously.
Forecast 2022 for commodities
In 2021, one could observe that the oil price has risen extraordinarily. This also contributes to the fact that inflation is so high at the moment. The Corona aid packages have caused the economy to overheat. This has also increased the demand for oil enormously. In their oil price forecast for 2022, experts assume that prices will continue to rise significantly next year. At the moment, oil is trading at USD 70.
A doubling of the price is likely. Of course, this would also benefit oil shares and gas shares. After that, there could be a major correction. This is also true because rising interest rates will slow down the correction.
Forecast 2022: Gold has a lot of potential
As discussed before, the biggest problem in the current situation is that inflation is too high. For sovereigns, high inflation, as long as it does not turn into hyperinflation or runaway inflation, is perfect. But it is very dangerous and in particular inflation is difficult to control, see also the example in Turkey (read more: Turkish stocks).
To protect oneself against inflation, it is a good idea to buy gold. The supply of gold is limited. For this reason, the commodity cannot be multiplied at will. The situation is quite different with currencies such as the euro or the USD.
According to analysts, the strong demand for the precious metal should cause it to rise to prices between USD 2,000 and 4,000. At least, that is the current gold forecast for 2022. To be fair, however, we would also like to say that a strong rise in gold has often been forecast, but this usually did not happen. So we would be cautious here.