Market analysts expect 2023 to have records highs for gold and other precious metals.
From the beginning of November, gold prices have generally been climbing as demand has been supported by market volatility, mounting recession expectations, and increased central bank gold purchases.
The precious metal is expected to reach record highs in 2023, according to several specialists.
Juerg Kiener, managing director and chief investment officer at Switzerland Asia Capital, stated to CNBC last month that the present market conditions are similar to those of 2001 and 2008. This bullishness on gold was also expressed before the end of last year.
In December 2022, Kiener said on CNBC’s “Street Signs Asia” that the market has a very good chance of making a significant move. “In 2001, the market didn’t just move 20 or 30%, it moved a lot. The same in 2008, when we had actually a smaller sell-off in the market and the stimulus coming back in, and gold went from $600 to $1,800 in no time. It will not be just 10% or 20%, I believe I’m considering a shift upward.”
Early on Tuesday, April 4, 2023, the price of gold reached a six-month high, and analysts predict that the surge will continue till 2023.
From the beginning of November, gold prices have generally been climbing as demand has been supported by market volatility, mounting recession expectations, and increased central bank gold purchases. Gold prices have risen since November of 2022.
“In general, we are looking for a price-friendly 2023 supported by recession and stock market valuation risks,” said Ole Hansen, head of commodity strategy at Saxo Bank. “An eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by year’s end all adding support.” “In addition, the de-dollarization observed by numerous central banks last year when a record amount of gold was purchased look poised to continue, thereby putting a soft floor under the market,” the article continues.
The trajectory of monetary policy, as central banks back off the aggressive interest rate hikes of the previous year amid slowing economic growth and potential recessions, will play a significant role in the forecast for global markets in 2023.
However, since inflation is anticipated to continue significantly higher than the target range in the majority of the world’s major economies, economists disagree on whether this will result in rate cuts by the end of the year.
The minutes from the most recent U.S. Federal Reserve meeting and the U.S. jobs report, according to Hansen, will be the two major factors that will affect gold prices.
After the 2008 Great Financial Crisis, “Central banks as a group have continued to add more and more gold to their holdings, with a new record established for the 3rd quarter of 2022,” stated Eric Strand, manager of the AuAg ESG Gold Mining ETF. He also stated, “2023 will see gold reach a new record high and usher in a “new secular bull market,” with prices topping $2,100 per ounce. We believe that central banks will change their stance on rate increases and turn dovish in 2023, which will set off an explosive rally for gold that will last for years. As a result, we anticipate gold to end 2023 at least 20% higher and see miners beating gold by a factor of two.”