Gold prices are down 7% within the past year, but some analysts see it as a minor speed bump en route to $2,100 later in the new year.

Gold prices are currently trading right around $1,800 and have been for quite some time, but they have been on the move as of late. Over the past few months, gold prices are up 3%.

Of course, inflation may have something to say about the precious metal’s recent gains. The Federal Reserve is looking to wind down its bond purchases and raise rates, which could certainly prop up the U.S. dollar.

Gold Price in US Dollars Chart

Nonetheless, some analysts feel that gold has enough momentum early in 2022 to power itself to highs.

“We do think across the course of 2022, we will see the gold price testing at the all-time record highs, but we can’t see it traveling much beyond that once it gets there,” said David Lennox, resource analyst at fund management company Fat Prophets.

“We do believe that high momentum in inflation and that lower U.S. dollar is going to drive the gold price higher in 2022,” Lennox added.

Gold Price in US Dollars Chart

Geopolitical Tensions Weigh In on Gold Prices

Geopolitical tensions could also weigh in on gold prices. That’s especially the case when it comes to the Russia-Ukraine crisis with both nations building up their military presences.

If the situation escalates into a full-blown conflict, this could drive up the prices for gold. That would further push prices up towards that $2,100 price target.

“If that happened, then we would see the gold price reacting quite significantly and our … $2,100 an ounce [target] would probably get here sooner rather than later,” Lennox added.

Investors looking for ways to own gold outside of traditional coins or bars can opt for gold funds. One such fund to consider is the Sprott Physical Gold Trust (PHYS), which gives investors easy access to gold exposure with the option to convert their ownership shares to physical gold.

“The Trusts’ precious metals are fully allocated which provides the Trusts with direct beneficial ownership,” the Sprott product website notes. “Unlike other bullion funds, the Trusts do not have an unallocated account that is used to facilitate transfers of bullion between financial institutions that act as authorized participants.”

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