According to Kitco News, the fund manager doesn't expect a bear market for stocks, but the unprecedented gains of the past two years appear to be slowing: "The stock market is going to have a tougher year than people think."
A stock market slowdown, he said, could also hurt economic growth, forcing the US Federal Reserve to pursue a less aggressive monetary policy this year.
Grosskopf sees a significant risk for 2022 that investors underestimate how the Fed's monetary policy will affect market conditions. “The Fed is now talking about three things it wants to do in quick succession,” he explains. “The Fed is talking about raising interest rates and starting to tighten its balance sheet, but that's only half the first step. The likelihood that they will be able to pull this off without any market correction is very small. The likelihood that we will have the best conditions for gold is quite high. And let's not forget that inflation is still very high."
Grosskopf still expects real interest rates to remain low, even if they continue to rise from historically negative levels last year.
Gold prices could rise again to record highs by the end of 2022, precious metals expert says: “I think such a move is possible if there is a broader market correction. I believe that we will see a slow rally in the gold market until people get worried and then we will see an explosion.”