With a recession looming and inflation still at decades-high levels, it may be a good time to start growing your gold savings. Here’s what you need to know about investing in gold in 2023.

Will Gold Be a Good Investment in 2023?

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The Spotlight

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Studies & research

Let’s be honest, it has been quite a challenging year for gold.

 in 2022, including rampant inflation, rising interest rates, and lingering geopolitical tensions.

As we are nearing the end of the year, you may be wondering: 

While there’s no definite answer to this question, we will try to give you an idea of where the price of gold could go next year.

What happened to the price of gold in 2022?

Why did gold not rally amid soaring inflation? 

What happened to the price of gold in 2022? 

As with any other asset, it has been a year of ups and downs for gold.

 to its highest level since 2020, as the 

 pushed investors to seek protection from rising 

Since then, however, other factors have come into play, making gold lose some of its gains. We call them 

 to curb stubbornly high inflation, pushing the U.S. dollar to its highest level in two decades.

The gold price stabilized by mid-May, supported by high inflation and geopolitical tensions. In September, it dropped 2.6%, mostly because of the 

and the Fed keeping up with its aggressive 

While these two factors weighed heavily on the gold price, some investors still think 

, especially with surging global inflation.

A cartoon man inflating a yellow balloon with a dollar sign, representing the growing U.S. dollar amid rising rates

As you know, rising rates and a strong dollar are often considered gold’s 

 ☠️. That’s in part because gold and other precious metals are traded in dollars. Therefore, 

a stronger dollar makes gold more expensive

 for foreign investors to buy in. As a result, the gold price declines due to weaker investor demand.

Reason #2: Investors believed the Fed would eventually have inflation under control.

Yes, you read that right. Even though inflation is soaring, some investors still believe the Fed would successfully bring it down. (Not everyone agrees, though 🤓).

A graph showing bond investors' expectations for long-term inflation and U.S. CPI between June 2021 and August 2022.

The graph shows the difference between the U.S. Consumer Price Index and long-term inflation expectations (known as the 

) expressed by U.S. bond market investors. 

Essentially, this graph tells us that some investors see inflation stabilizing over time, even though it's still very high now. 

 that reflects investors' feelings about certain market events, including inflation. The gold price reflects these feelings too. 

So, naturally, gold didn't rise as much as expected in response to high inflation because some investors perceived it as less of a risk in the future.

But it doesn’t mean gold has performed poorly this year. Quite the contrary, gold held up quite well despite all the pressure coming from the surging dollar and rising rates, according to the Global Head of Research at the World Gold Council, Juan Carlos Artigas.

The chart below suggests that the gold price should have fallen by more than 

by now if it was only determined by interest rates and the dollar. But it didn’t. In reality, the gold price was higher than the simple model predicted.

A graph showing the simple gold model based on real rates and U.S dollar and the actual gold price between August 2017 and August 2022.

Gold is resilient to the effects of the so-called “negative drivers”, including a strong dollar.

reacts to its “positive drivers,” such as inflation and geopolitical risks.  

There’s room for the gold price to go up if positive price drivers stay in place.

Even though the surge in the U.S. dollar is likely to remain an obstacle, there are some positive signs for the gold price.

Central banks ♥️ gold in 2022. According to the World Gold Council, central bank demand for gold hit a 

A World Gold Council graph showing central bank gold demand that hit a 55-year high in 2022.

Such a steep spike in purchases shows that 

gold remains an indispensable asset for central banks

will end up impacting the price of gold, often driving it up.

A cartoon man in a blue suit balancing on a dice

Hit by the energy crisis, half of the Eurozone countries are now heading for a recession, and the U.S. could soon be there, too. This could be a good sign for gold.

There’s a general agreement, that during a recession, riskier assets like stocks and high-yield bonds tend to go down, while 

gold and U.S. Treasuries usually increase

, the gold price may go up if the U.S. economy slides into a recession and the Fed cuts rates.

As shown in one of their scenarios, there’s a 

 chance of a recession with substantial rate cuts to zero by 2025 that would see the price of gold jump to 

"Gold's downside in the case of a 'soft landing' or further Fed hawkishness is significantly less than gold's upside in the case of a growth shock that pushes the U.S. economy into a recession,"

Sign #3: The impact of rising rates seems to be fading

a concerned cartoon man looking at a dropping economic indicator representing the fading impact of rising rates on the gold price

 and their impact on gold as they expect them to get lower in the future.

“Gold investors now view policy rate rises as less of a threat to gold than before. They appear to have accepted Fed hawkishness and its terminal rate forecast. In addition, their sensitivity to Federal Market Open Committee (FOMC) announcements has fallen

 and […] forward rate expectations signal a consensus expectation for lower rates ahead,” 

the World Gold Council said in its market commentary. 

This could mean that, in the future, rates might be less of a hurdle for the gold price, letting some of its supporting factors take center stage. 

Well, no one knows for sure, since everything depends on your investment strategy and personal needs. But if you think you should buy gold, here is 

Picking the right time to do it can be tricky since gold prices are hard to predict. As you have seen in this SPOTLIGHT, the 

price of gold can be influenced by multiple factors

 at the same time. And this is exactly what happened this year:

The gold price soared in early March, driven by fears about the consequences of 

 to a 2-decade high, which ultimately pushed the gold price down.

Despite all that, gold has remained resilient to these pressures, leaving room for potential future price increases.

So if you feel like now could be a good time to start growing your gold savings, check out our SPOTLIGHT for 

 that can help you choose the right time to buy gold.

Gold offers several powerful advantages as a store of value. Discover why more and more investors are turning to this precious metal.

What are the advantages of gold compared to other investments?

A look at the strong changes in demand in the gold sector y-o-y.

A Shift in Gold Demand Trends

Good thing central banks can't print gold. 😉

21.9% Annual Inflation... and Counting

Despite slowing down, the frenzy around silver has kept prices up, and demand for physical bars and coins strong, while doubts over the state of the silver stocks emerge. Is Silver Setting the Stage for a Breakout?

Is Silver Setting the Stage for a Breakout?

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17/02/22: The European Central Bank could raise interest rates in 2022, the gold price goes up as tensions over Ukraine resurface, Switzerland lifts most Covid-19 restrictions. And more.

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#Silversqueeze 2.0?                         

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Meet GOLD AVENUE CEO, Alessandro Soldati, in our first Q&A video session!

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The Fed desperately wants higher inflation that would exceed its 2% target. Will the ECB follow the lead? It looks like it. 

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24/02/22: Russia has launched a full-scale invasion of Ukraine, the S&P is in a correction for the first time since the 2020 Wall Street plunge, gold hits a 20-month high. And more. 

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Russia’s decision to remove the US dollar assets from its sovereign wealth fund and partially replace them by gold boosts the yellow metal’s importance as a strategic asset.

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World markets have taken a hit as the Russian invasion of Ukraine spooked investors around the globe. Here’s what you can do right now to protect your investment portfolio and gold savings.

Ukraine-Russia Conflict: What Impact on Your Savings?

You probably noticed certain industries and communities aren’t bouncing back as quickly as others during times of recession or economic crisis. That’s what the K-shaped recovery is all about.

What the K-Shaped Recovery Means for Gold

03/03/22: Markets are on a wild rollercoaster ride, Eurozone inflation at a record high, Russia intensifies its invasion of Ukraine, gold proves itself as a safe haven. And more.

Weekly digest: inflation rising, Russia sanctions, gold gains

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The #silversqueeze movement took the investment world by storm and has the potential of shaking up the silver market. Will it be here for the long term?

#silversqueeze

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10/03/22: Gold and palladium hit a record high, oil records its worst day since November, Biden signs an executive order on crypto. And more. 

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In 2021, central banks continued buying gold, with emerging countries stepping up as key net buyers. Do you wonder why? Here’s what you need to know.

Central Bank Gold Buying Explained

With inflation soaring in Europe and the U.S, learn how to navigate higher consumer prices from this great personal finance video from Sorelle Amore.

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17/03/22: The Fed has raised interest rates for the 1st time since 2018, one of Brazil’s biggest funds goes for gold, E.U.'s rethinking gas supplies. And more.

Weekly Digest: Fed’s 1st Rate Hike, Gold in Demand

After Russia’s invasion of Ukraine, investors rushed to gold, the world’s oldest safe-haven asset, pushing its price to a new record. Why did this happen? Here’s what you need to know. 

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24/07/22: The U.K. hit by the worst cost-of-living crisis in decades, Powell finally admits inflation is “much too high”, European stocks drop. And more.

Weekly Digest: Cost of Living Crisis, Inflation Problem

The U.S. Federal Reserve has announced its first interest rate hike since 2018. What could this mean for the gold price? Here’s what you need to know. 

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31/03/22: European inflation soars to new heights, Russia resumes gold purchases, no breakthrough seen in Ukraine war despite renewed peace talks. And more. 

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It seems that the ongoing US presidential election has not changed the situation in the gold market so far as the macro backdrop remains quite favorable to the yellow metal.

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07/04/22: More and more people are worried about rising consumer prices, experts think the U.S. recession is inevitable, cryptocurrencies are facing some privacy issues. And more.

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14/4/22: U.S. inflation hit 8.5% in March, the highest since 1981, EU ban on Russian gas could spark a sharp recession in Germany, Ukraine peace talks “at a dead end.” And more.

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21/04/2022: The IMF cuts its global economic growth forecast, UN says the war in Ukraine could create a global food crisis “beyond anything seen since World War II,” Macron and Le Pen fight for the presidency. And more.

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28/4/22: Russia halts gas supplies to Poland and Bulgaria, the Fed is set for more aggressive rate hikes to tame inflation, Musk seals the deal to buy Twitter. And more.

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04/05/22: The Fed is set to fight inflation with the fastest rate hikes in decades, Fitch trims China’s 2022 growth forecast amid Covid-19 lockdowns, two Argentinian banks will allow crypto trading. And more.

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12/05/22: U.S. inflation stays at a 40-year high, defying expectations of a bigger drop, crypto and stocks fall, reacting to the U.S. inflation data. And more.

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19/05/22: U.S. stocks post the biggest daily drop in almost two years, Sri Lanka default hints at troubles ahead for developing nations, E.U. slashes growth forecast. And more.

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25/05/2022: U.S. stocks slumped again amid economic data, the global food crisis risks causing a “messy” migration in Europe, Bitcoin could fall to $8,000. And more.

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02/06/22: The Eurozone inflation hits a new record high, JPMorgan Chase CEO warns of the economic hurricane, EU leaders agree to ban most Russian crude imports. And more. 

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09/06/22: The OECD has lowered its growth forecast for this year, Eurozone inflation is expected to peak, U.K. economy is facing stagnation. And more.

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Thanks to GOLD AVENUE, Tibo InShape was able to enter the famous gold refinery MKS PAMP. Watch the video and follow Tibo in his discovery of gold!

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16/06/22: Fed announced a historic rate hike, a U.S. recession is looming, bitcoin is plunging, U.K. economy is shrinking, China’s contact with aliens. And more. 

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Country-specific guides to understand gold as an investment in 2021 from the World Gold Council.

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23/06/22: The stock market dropped as recession fears grow, UK inflation hits a new 40-year high, Bitcoin could plunge to a low of $13,000. And more.

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While stocks and bitcoin went down sharply due to rising inflation and uncertain economic outlook, gold has retained its value, exactly when investors and savers needed it. 

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29/06/22: Morgan Stanley sees a mild recession coming to the Eurozone this year, G7 countries agree to ban gold imports from Russia, German inflation eases. And more. 