2021 has been a rough going for gold, but prices did hold steady heading into the Christmas holiday, and demand in 2022 could help add a dose of bullishness for the precious metal.

Gold has been tempered thanks to a strong dollar for much of the year. The greenback, as evidenced by the ICE US Dollar index, has been on a steady uptrend since summer.

Even a rise in COVID cases heading into the fourth quarter couldn’t spark a large enough rally to put gold in positive territory for the year. The precious metal was down about 4% heading into the Christmas holiday while the dollar index was up 7%.

Nonetheless, this was to be expected this time of year, according to some market analysts.

“This is just noise on a low-volume day ahead of Christmas,” said Daniel Pavilonis, a senior market strategist at RJO Futures.

Gold’s case wasn’t helped by the U.S. Federal Reserve winding down its economic stimulus measures with a pullback in bond purchases. The Fed announced that it would see three interest rate hikes in 2022, helping the case for bullishness in the greenback.

Despite these headwinds, gold has stayed range-bound within an $1,800 holding pattern instead of taking a sharp decline. This comes as more investors start to slough off the potential economic effects of the Omicron variant on the notion that it’s potentially less severe in terms of symptoms despite being more contagious.

“Gold faces technical resistance at $1,815 and $1,826, with geopolitical risks ahead potentially keeping gold supported, despite the tapering narrative,” said Nicholas Frappell, a global general manager at ABC Bullion.

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Momentum Into 2022?

Of course, if the narrative changes and the Omicron variant is more potent than originally deemed, gold could get an early 2022 boost. Additionally, seasonal demand could give gold the kick-start it needs for the new year.

“From a seasonal perspective, demand for physical gold is a big aid in driving prices higher from mid-December to Valentine’s Day. In the next 6-8 weeks, gold and silver could thrive,” Walsh Trading co-director Sean Lusk says in a Kitco News article. “With the new variant coming in, easy money policies will remain. Granted, the Fed signaled that they would start rate hikes. But there is still a lot of uncertainty out there — global economic recovery and new geopolitical tensions.”

“The trend is turning higher into next year. It seems like the new COVID-19 variant could give the Fed more pause on the aggressive taper and rate hikes. Geopolitical risks or a crude oil disruption could impact markets’ perceptions,” Lusk adds.

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