Wednesday, February 28, 2024

Will the price of gold rise to $2,000 an ounce again in 2023?

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Gold prices grew strongly in October on the back of rising geopolitical tensions in the Middle East, ending the month with gains of around 7.5%, the first monthly gain in three months. Thus, the yellow metal has gained about 7.68% since the beginning of the year till now. It is currently struggling. The precious metal retreated significantly later in the first half of the year rising above the important psychological level of $2,000 per ounce. Each time the ounce moves towards the $2050 region. Sharp sell-offs always followed, leading to a deeper correction, and with a new record already set in the first half of 2023, the question remains: Will gold prices decline in the coming days or will prices hit record highs? These are some questions. The precious metal is still in a precarious position and is in danger of falling. Amid the strength of the US dollar at $1,900 per ounce, price expectations will vary. Trade Notably, analysts and strategists have different views on several influencing factors. There is still uncertainty regarding geopolitical tensions in the Middle East region, as fears of an escalation and the possibility of a war between Hamas and Israel are growing. Expanding to include other regions, there is still uncertainty around the Federal Reserve’s monetary policy, the risks of a recession, the sale and purchase of foreign reserves, and the strength of the dollar. All of the above will heavily influence the outlook for precious metal and price sentiment. And another factor that greatly influences the outlook for price sentiment is future gold price predictions.Strong resistance at the level 2080 dollarDemand for gold soared in 2020 at the height of the pandemic, with investors rushing to buy the metal as a safe haven and store of wealth. The $2,075 level saw the metal decline, following a deep decline, to around $1,676. Subsequently, gold rose to $2,049 in March 2022, and moved higher following a rejection of the $2,049 key area. With the precious metal hitting a low of $1,630 in November, the market is already starting to adjust to the outlook for the U.S. economy with changing interest rates and supply resilience, in line with the previous year’s price action. US Federal Reserve Bank The JP Morgan acquisition peaked as the stock hit a record high of $2,046 in the first half of 2023. Republic Bank said the banking crisis fueled risk aversion, forcing investors to seek safety in safe havens like gold, while avoiding riskier assets like stocks. Also, moves by the U.S. and its allies to freeze assets in Russia forced central banks to buy real. Gold, which fueled market demand, saw the net effect of prices rising to record levels. As a result, gold demand reached an 11-year high of 4,741 tonnes in 2020, up from 3,678 tonnes in 2020. Strong interest from genuine investors Fast forward to the present, the upward movement in gold prices slowed in the second half of the year and turned sluggish again, and the price of the precious metal traded in a narrow trading range between $1,900 and $1,950. Gold’s decline for most of the year was due to lower net purchases by central banks.The buying spree came as central banks made record purchases of gold last year and into the first quarter of this year. A period when banks sought to protect their economies from high inflation rates and volatile bond prices. Moving forward today, net purchases of gold are expected to decline in 2023 as Turkey remains a net seller. The country’s central bank is unwinding its bullish gold reserves in response to strong demand from the domestic market, and The supply glut has affected the market…demand has significantly depressed prices, leading to a decline from above $2,000 an ounce.Gold price forecast for the entire year 2023It’s likely to fall below $1,900 an ounce by the end of the year, but why will gold prices fall? That’s a big ask, especially as it struggles again to find support above $2,000. If history is anything to go by, the outlook for gold looks increasingly bleak as prices actually begin to fall, recording similar movements recorded in previous years. When they tried and failed to reach the $2,100 level, prices fell significantly as interest rates rose. Economic data A strong U.S. Federal Reserve shows a growing flexible labor market in retail sales, and a booming manufacturing sector has killed chances for the U.S. Federal Reserve to cut interest rates. A high interest rate environment has always led to… increased dollar strength, leading to a significant decline in gold prices. Similarly, in the face of rising interest rates, traders are turning to bonds to benefit from higher yields. The cost of the precious metal, while the Federal Reserve has temporarily stopped raising interest rates amid fears it could push the U.S. economy into recession, the prospects for cuts are diminishing day by day, and at this point, the U.S. is poised to remain in a high interest rate environment until next year. .Especially as economic data confirmed the health of the US economy, the Federal Reserve could use it to justify… commitment to higher interest rates to raise inflation to target levels As the Federal Reserve is unlikely to cut interest rates in the second half of next year, investment banks and analysts have begun to adjust their expectations for future gold prices.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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