• Gold prices have surged to a six-month high and analysts predict further growth in the coming year.
• The surge is attributed to a combination of macro and microeconomic factors such as market turbulence, increasing recession expectations, and a rise in gold purchases from central banks.
• Ole Hansen, head of commodity strategy at Saxo Bank, has projected that gold prices will reach record highs in 2023.
The price of gold has been on a steady rise in recent months, and analysts are predicting a further surge as 2023 begins. On Tuesday, spot gold reached a six-month high of just shy of $1,850 per troy ounce, before easing off to trade at $1,834 per ounce late morning in Europe. Meanwhile, US gold futures were trading up 0.72% at $1,839.40 by 6 am Eastern Time.
The recent surge in gold prices is attributed to a combination of macro and microeconomic factors, such as market turbulence, increasing recession expectations, and a rise in gold purchases from central banks. Echoing analyst projections that gold price will attain record highs in 2023, Ole Hansen, head of the commodity strategy at Saxo Bank, commented: “In general, we are looking for a price friendly 2023 supported by continued stimulus measures, a weak US dollar, and a low real yields environment.”
Hansen added that gold remains attractive in the current market environment due to its low correlation with other assets and its ability to hedge against inflation. Furthermore, the investment bank’s commodity strategist noted that gold’s volatility is likely to remain at relatively low levels, allowing for more sustained appreciation in prices.
In addition to these macroeconomic factors, gold prices have been further bolstered by a rise in speculative trading. According to the World Gold Council, the amount of gold held by investors has risen by 6% over the past three months. At the same time, the SPDR Gold Trust, a gold-backed exchange-traded fund, has seen its holdings increase by 4.7 million ounces since the beginning of November.
Overall, the outlook for gold prices in 2023 remains positive. Analysts anticipate that further stimulus measures, a weak US dollar, and a low real yields environment will continue to provide a supportive environment for gold prices. Furthermore, the increase in speculative trading is likely to further buoy prices. As such, it appears that gold is set for further gains in the coming year.