World Famous Names: Gold Will Be At These Levels in 2023!

World Famous Names: Gold Will Be At These Levels in 2023!
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World Famous Names: Gold Will Be At These Levels in 2023!

Gold is on track to end the year with a slight loss. However, the price metal has seen a solid rally and is poised for a healthy start to 2023. In this environment, an asset management firm sees potential to rise above $2,000 under it. In addition, hedge funds are increasing their long positions in the price metal.

“This will ignite an explosive move for gold”

Gold prices hover around $1,800. The precious metal plans to end 2022 with an 11% rise from last month’s two-year low. Portfolio manager and creator of the AuAG ESG Gold Mining exchange-traded fund, which is traded on the European stock market, Eric Strand, says that under the 2023 outlook, a new bull run may begin. Strand comments:

We expect an all-time high for gold throughout 2023 and the start of a new always bull market when the price rises above $2,100.

World Famous Names: Gold Will Be At These Levels in 2023!

In 2022 US inflation reached its highest level in 40 years. The Federal Reserve has also embarked on its most aggressive tightening cycle in 40 years to cool inflation. Therefore, investor demand for gold has been sluggish for most of 2022. However, as the Fed’s aggressive monetary policy stance appears to be nearing its end, the gold market has shifted in investor interest. Strand says on this bet:

We are of the opinion that central banks will focus on interest rate hikes and act dovish throughout 2023. This will ignite an explosive move for gold in the years to come.

“Gold miners are historically cheaper than gold today”

While gold is expected to see an explosive move next year, Strand says the real price will be in the mining department. The weak price action of gold last year put pressure on the mining sector. Many analysts say the vulnerability in the mining segment is worse than the multi-year bear market between 2013 and mid-2015. Strand points out that valuations in the mining sector are at a historic low against the S&P 500. In this context, Strand makes the following assessment:

Gold miners are historically cheaper today than gold. This situation will return and the future will always surpass it in the gold bull market.

World Famous Names: Gold Will Be At These Levels in 2023!

“A lower peak interest rate means bullish for gold”

Gold’s ability to hold the line around $1,800 has caused hedge funds to increase their long status in the bottom. It’s finally starting to attract new bulls as funds cut shorts further. According to some analysts, falling inflation has increased expectations that the Fed will begin to slow down rate hikes. That’s why investors are testing the expensive metals markets.

Commodities analyst from Société Générale notes that the expensive metals market saw an inflow of $3.6 billion last week, following weaker-than-expected inflation information for November. Low inflation is typically downside for gold. However, bullion has recently been bolstered by the Fed’s expectation of slowing rate hikes. “Because gold is a non-interest bearing asset, a lower peak interest rate means bullion for bullion,” analysts said in a note on Monday.

World Famous Names: Gold Will Be At These Levels in 2023!

“Money managers started to create gold longs”

The CFTC’s disaggregated Commitments of Traders report for the week ended December 13 showed that money managers increased their speculative gross longs on Comex gold futures by 10,108 contracts to 103,737. At the same time, shorts fell by 3,854 contracts to 66,288.

The gold market is currently net long with 37,449 contracts. It also reached its highest level since the end of August. This allowed gold to see significant bullish interest for the first time since the beginning of October. In a note, TD Securities analysts highlight:

After weeks of shorting, money managers once again started to create long positions in the gold market. With the inflation information coming in below expectations, market participants saw the yellow metal rise above $1,800 once again and predicted that the upcoming FOMC meeting would be biased towards the dove.

World Famous Names: Gold Will Be At These Levels in 2023!

“Gold has room to rise”

However, TDS expects the Fed’s continued tightening in 2023 to put pressure on gold throughout the first quarter. However, John Reade, chief market strategist at the World Gold Board, said in a comment on Twitter that gold has room to rise. In this context, Reade made the following statement:

Gross long cases are heavily under pressure by previous gold power cycles, while gross short cases are on the slightly higher side.

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