UBS says it expects the Federal Reserve to withdraw monetary accommodation faster than some other major central banks in 2022 and this divergence in policy leads them to expect the US dollar to strengthen further.

On gold the analysts at UBS hold a negative view, citing:

  • a backdrop of rising rates and a belief that inflation will fall

Further, UBS sees demand for oil still rising, and thus have a positive view on its price.

On equities:

  • While mindful of risks around COVID-19 variants and inflation, we keep a positive outlook on stocks for the start of 2022.
  • Global economic growth is likely to remain above trend for the first half of 2022, monetary policy is still accommodative, even if emergency support measures are being scaled back, and we expect 10% growth in global corporate earnings in the year ahead.

Weekly gold candles show a broad sideways track since September of 2020. Base building? (Comments welcome):

gold chart 29 December 2021