OunceeAccording to Extrabet Giriş report; The price of gold had a good day in the last days of 2022 and hopes that inflation will decrease; While China continues to reduce strict restrictions regarding Corona in the country. Since the beginning of November or the middle of October, the price of gold has increased by almost 13%. Markets continue to price in recent US data showing lower-than-expected inflation and consumer spending. This data could take some of the burden off the Federal Reserve and allow it to slow the pace of interest rate hikes.
A profitable year for gold traders
Extrabet : Gold prices rose 16 percent between the end of January 2022 and early March, reaching a previous record high of $2,075 an ounce in August 2020. The rise was fueled by Russia’s invasion of Ukraine, which drove investors away from risky assets.
However, gold prices reversed course after the US central bank delivered its first interest rate hike of the year in mid-March. The decline in gold prices accelerated as the Federal Reserve continued to raise interest rates until the end of the third quarter of 2022.
Gold has fallen 22 percent from its March-September high, when it hit $1,615 an ounce. The fact that the bears failed to break below $1,600 an ounce on three different occasions in the second half of 2022 helped bulls mount a year-end rally that appears to have been won by the bulls.
The yellow metal came under pressure as U.S. Treasury yields rose and the U.S. dollar hit a 20-year high, following a spike in the Ukraine war. In addition, China’s policy against Corona and strict quarantines have affected the demand for jewelry from one of the largest consumers of precious metals in the world, and if this trend continues, it can be said that gold may not be able to maintain its momentum in 2023.
This safe-haven asset has performed differently against other metals this year. It outperformed copper and palladium but lost the battle to silver and platinum. While gold prices have remained relatively flat in 2022, the yellow metal has continued to trend higher throughout the year.
2023 outlook for ounce prices
forexrainbow : The beginning of the new year is the period of the year when financial market analysts and strategists share their vision and set their goals for 2023. One of the most surprising calls for 2023 is Saxo Bank’s forecast that the price of gold will reach $3,000 per ounce in 2023, an increase of about 66%, which could be a new record for gold in global markets.
Ole Hansen, the bank’s head of commodity strategy, believes that the price of gold is driven by three key factors: a “war economy” mentality that makes gold more attractive than foreign reserves such as the dollar, investment in national security and increased global liquidity, which could eventually push prices up. Take gold beyond $3,000.
In a post on his personal page before presenting the analysis, Hansen wrote: “Ounce held higher amid changing sea state and implications for real and forward interest rates going forward.”
Hansen believes that the price of gold will reach astronomical numbers in 2023, stating that “gold will approach $2,075 as if there is no gold in the market at all and will reach at least $3,000 next year.”
Saxo’s bull case for gold is also based on the expectation that the dollar will weaken in the coming year after 2022. This view is echoed by CRU analyst Kirill Kirilenko, who believes the Fed’s more balanced approach is likely to weaken the dollar. This issue allows the gold bulls to have more breathing space and energy to hold a rally with more speed and power this year.
Go ld is currently trading higher than its long-term historical correlation with 10-year real rates, while its correlation with the dollar remains negative. Last month, major asset managers made a sharp U-turn, switching from net short positions to net buys in gold futures.
Going forward, gold bullion could continue to climb in 2023 and experience an extraordinary growth in the event of a global recession and central banks turning to loose monetary policies, especially in the United States.
In the best-case scenario, ounce could even surpass its record highs if global deflation continues to worsen and central banks refrain from further policy tightening. This is likely to force investors to shun bonds, stocks and currencies as they did in the 1970s.
On the other hand, the worst-case scenario for gold in the coming year will include further tightening of monetary policies and major interest rate hikes and new interest rates by the Federal Reserve, which will make the gold market more tense during a recession. However, the onset of a recession could offset some of the negative effects of high interest rates, suggesting that gold may not suffer as much as this year’s selloff.
Strong central bank demand for ounce
The World Ounce Council (WGC) announced last month that global central banks bought a record 399 tonnes of gold worth about $20 billion in the third quarter of 2022 in an effort to boost global demand for bullion.
The WGC wrote in its quarterly report: “The yellow metal saw strong demand from jewelers and buyers of bullion and coins.” However, the report also showed that exchange-traded funds (ETFs) stored less ouncfor investors in the third quarter.
In addition, many investors unloaded their holdings in gold-backed CFDs and ETFs in the quarter amid higher interest rates, boosting returns on other assets.
Gold prices could continue to trade higher in the coming months after a strong end-of-year rally, boosted by anticipation of the Federal Reserve’s actions as well as improving risk sentiment around the Chinese economy. Additionally, the latest media reports suggest strong demand for gold from central banks is likely to continue into 2023.