4 Bomb Claims for Gold Prices: These Records Are Coming!

4 Bomb Claims for Gold Prices: These Records Are Coming!
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TheGoldForecast editor Gary Wagner is pretty bullish on gold prices. Analysts at BCA predict that in the 2023 outlook, gold will rise above $1,900 next year. Strategists at Credit Suisse predict that gold could make a profit in late 2023. Strategists at Wells Fargo, on the other hand, prefer cautious claims.

“Fed will not reach 2% inflation in 2023, gold will see new highs”

According to Gary Wagner, editor of TheGoldForecast.com, the Federal Reserve will not reach its target of 2% inflation in 2023. But gold will see new peaks. Wagner explains his views on this issue in the following form:

There are no charts, graphs or studies showing that the Fed will reach its 2% target in 2023. In fact, if they act on what they predict and declare, we’re going to be plagued by high interest rates all year.

gold price

At the last Fed meeting, the FOMC projected a 5 percent Fed Funds Rate in 2023. Technical analyst Wagner says that despite forecasting a lousy year in terms of inflation and interest rates, he remains “on the uptrend for gold.” In this context, his analyst makes the following claims:

I expect gold to rise to $2,250, with an estimated $2,400. I believe it will certainly exceed $2,000 in the second quarter. I’m looking for all-time highs next year.

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Gold and geopolitical risks

Gold is perceived as a hedge against geopolitical risk. However, Wagner says the link between geopolitics and gold is not clear. In this context, Wagner makes the following assessment:

When we conducted missile tests by North Korea, we did not experience large increases in gold prices. While the war in Ukraine was going on, I thought about what gold was doing. However, gold does not seem to react to it. I think you get a sudden reaction at first, but the public got tired of this information over time. People have a weak memory, so to speak.

4 Bomb Claims for Gold Prices: These Records Are Coming!

“Gold prices will rise above $1,900”

The gold market ended 2022 on a solid basis. A research firm expects the yellow metal’s momentum in the fourth quarter to continue into 2023. Analysts at BCA predict that in the 2023 outlook, gold prices will rise above $1,900 next year. The positive outlook came as the company started to form a bullish situation in November.

The research firm expects the Fed’s monetary policy peak, always high inflation and global economic uncertainty during the new year. As these developments will support prices, gold is on the rise. Analysts underline the following issues in the report:

The development of gold prices next year will depend on Fed monetary policy and its impact on the course of the dollar. Given the heightened uncertainty and a dovish Fed base that will weaken the dollar next year, safe harbor demand for gold is likely to increase.

4 Bomb Claims for Gold Prices: These Records Are Coming!

“The biggest risk for gold is the threat of persistent inflation”

Currently, markets expect the Fed to raise interest rates to a mid-high from 5.00% to 5.25% in the first half of the year. The BCA says it expects the Fed to begin lowering interest rates by the end of the year or early 2024, as the horrors of calm grow. Although inflation has fallen from its summer highs, BCA warns investors that the threat remains.

With increasing investment demand for gold, BCA anticipates an increase in physical demand driven by central bank purchases. “In the long term, EM central banks will be willing to exchange US dollars for gold in their reserves to protect themselves from the risk of Western financial sanctions that Russia is currently dealing with,” analysts say.

The biggest risk to the BCA’s bullish outlook is the persistent threat of inflation, which is said to force the Fed to continue its aggressive monetary policies. “Higher interest rates will increase the opportunity cost of holding non-yielding bullion. It will also support the anti-correlated US dollar with gold,” he says.

4 Bomb Claims for Gold Prices: These Records Are Coming!

“The base for gold prices is getting better”

It is possible that the ground for cyclical commodities will remain strong and volatile. However, strategists at Credit Suisse predict that gold could turn a profit in late 2023. In this context, strategists make the following statement:

As we enter 2023, the place for cyclical markets is still unfavorable. However, further central bank tightening efforts are expected. Also, the Fed may be near the top of the hawkish. This will provide a beautifying base for precious metals, especially gold. While central banks take the risk of causing a deep growth slump, we see some upside risks to gold as time progresses. It may be too early to invest directly. However, we see the medium-term positive optionality as logical.

4 Bomb Claims for Gold Prices: These Records Are Coming!

“Gold prices are under pressure”

Commodity bull great cycle has a positive effect on commodities in general. But the strategists at Wells Fargo are neutral on the precious metals segment, including gold. Strategists make the following statement for their views on this issue:

Gold has its advantages. However, the cons have been driving prices for a while. The dollar’s rise to a 20-year high in 2022 was gold’s strongest minus. However, we hope that the flattening in 2023 and the subsequent decline at the expense of the dollar will ease some of the pressure on gold. Other positive things that can help in 2023 are positive supply/demand stability and very sell price conditions. Our 2023 target range of $1,900 to mid-$2,000 reflects in-line commodity performance a little extra. Because gold seems to have been sold a lot. However, we caution investors not to be too aggressive with gold until it shows more favorable price action.

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