- European indices closed near their record highs
- US500 hit new ATH
- Goldman Sachs expects three interest hikes in 2022
The final week of 2021 starts really positively although it is worth remembering that we are also dealing with a limited volume. Also end of the year period, just like end of the quarter periods, are marked with big positioning changes among investment funds. Managers often engage in the so-called "window dressing" - an action of buying well-known shares with the intent of highlighting them among funds' top10 holding list. Underperforming stocks also tend to be sold at the year's end as investors seek to optimize their taxes.
Therefore it is not surprising that the S&P 500 index hit a new all-time high, while Nasdaq is trading slightly below record levels. Meanwhile Goldman Sachs, one of the most important investment banks in the world, expects three interest rate hikes from the Fed in the coming year and, more importantly, the first one is to take place in March. GS also believes that the Fed will keep the pace of monetary tightening on a quarterly basis, which means that key decisions will be taken during the meetings along with the publication of macroeconomic forecasts.
During today’s session the dollar was under pressure which supported gold and oil prices. The end-of-year seasonality works well for Wall Street and gold. Of course, the indices have had a phenomenal year. However, this cannot be said about the precious metals market. In annual terms, gold has lost a few percent, but in the case of silver, palladium and platinum, losses can even exceed a dozen or so percent.
The last seven days have been very positive for Bitcoin, the price of which has risen almost 10% and broke above the $ 50,000 mark after a "Santa Claus rally" swept the cryptocurrency markets on Friday. Also, some altcoins, such as Polkadot and Cardano, rose sharply against BTC. However, it is worth noting that the end of the year as well as the first days of January are usually positive for Bitcoin.
Silver fell sharply following the last FOMC decision, however buyers managed to halt declines around major support at $21.50 and price quickly rebounded. Currently silver is testing resistance at $23.00 which is marked with previous price reactions. Should a break higher occur, upward move may accelerate towards $23.60 which coincides with 23.6% Fibonacci retracement of the downward correction launched in January 2021 and two SMA’s. Source: xStation5
