In the blink of an eye, we're in 2023.
We have celebrated the new year with fireworks and street parties for the first time since the beginning of the Covid pandemic, but now it’s time to return to reality and get back to work.
Symbolically, we are starting the year with gold price projections. Even though there's no crystal ball to tell us where the price will go exactly, knowing what to expect is always helpful.
While we will release our own Precious Metals Forecast for 2023 very soon, we’ve already come across some interesting gold price predictions. Some of them are very, very bullish.🐂
So we decided to do a little roundup.
The World Gold Council: any forecasts for 2023 are more uncertain than usual
It’s no surprise, considering all the mess that happened in 2022. And yet the World Gold Council predicts “a stable but positive” performance for gold in 2023.
“Going forward, [the] interplay between inflation and central-bank intervention will be key in determining the outlook for 2023 and gold’s performance,” the World Gold Council says in its Gold Outlook 2023.
Here are some of the influences the World Gold Council says can be good for gold this year:
- A mild recession and weaker earnings: “Gold […] could provide protection as it typically fares well during recessions, delivering positive returns in five out of the last seven recessions.”
- Further weakening of the U.S. dollar: “The dollar is likely to be pressured, particularly as falling inflation and slower growth take hold. And a dollar peak has historically been good for gold, yielding positive gold returns 80% of the time 12 months after the peak.”
- Geopolitical tensions: “Geopolitical flare-ups could lend support to gold investment, as we saw in Q1’22, as investors look to shield themselves from any further turbulence.”
- Growing consumer demand for gold in Europe: “European gold bar and coin investment is likely to remain robust in 2023 as retail investors – especially in Germanic markets – look to protect their wealth. Even a decline in inflation is unlikely to encourage lower demand, given underlying risks.”
Alternatively, gold might not do as well if there's a "soft landing" that avoids a recession that usually benefits riskier assets like stocks and crypto.
Let's wait and see how things turn out.
Now, it’s time to get a little crazy. In a good way. 🙂
Swiss Asia Capital: The gold price could surge to $4,000 an ounce in 2023
Even if this prediction sounds a little extreme, some analysts see the gold market making a major move and rising 10% or even 20% this year.
💡Did you know?
The highest price of gold ever recorded was $2,053 an ounce on August 7, 2020. This price increase was in large part due to economic uncertainty at the heart of the COVID-19 pandemic.
In March 2022, the gold price almost hit a new record, at $2,022 an ounce, with investors turning to physical gold for protection amid rising geopolitical tensions as Russia launched its war on Ukraine.
The price of gold today hovers around $1,800 an ounce.
If you want to buy and sell gold, track the live gold price with our gold price chart.
According to Juerg Kiener, Chief Investment Officer at Swiss Asia Capital, the price of gold per ounce could reach between $2,500 and $4,000 at some point in 2023.
Kiener explains such a big price change by a mild recession that many countries are likely to face in the coming months, which will lead to central banks slowing their rate hikes and making gold instantly more attractive to investors and central banks.
💡Did you know?
According to the World Gold Council, central banks bought 400 tonnes of gold bars and coins in the third quarter of 2022, more than doubling the previous record of 241 tonnes in 2018.
Why are central banks investing in gold? Read our SPOTLIGHT to learn more.
“Since the 2000s, the average return [on] gold in any currency is somewhere between 8% and 10% a year. You haven’t achieved that in the bond market. You have not achieved that in the equity market,” Kiener says.
Saxo Bank: The price of gold can rise by about 67% from its current level of $1,800 an ounce
Here comes another incredibly bullish expectation for gold from Ole Hansen, Head of Commodity Strategy at Saxo Bank.
“Gold slices through the double top near USD 2,075 as if it wasn’t there and hurtles to at least USD 3,000 next year,” Hansen writes in his “Outrageous Predictions” report.
Mostly, he puts down gold’s surge to two factors:
- A growing “war economy mentality”: “The geopolitical backdrop of an increasing war economy mentality of self-reliance and minimizing holdings of foreign reserves, preferring gold.”
- Countries investing more in new national security priorities: these include energy sources, the energy transition, and supply chains.
Finally, when it comes to milder bullish expectations for gold, both Citi and UBS expect the gold price to reach $1,900 per ounce in 2023.
What are the key takeaways?
- It looks like falling, yet still high, inflation, and Fed policy moves, will be gold’s biggest drivers in 2023.
- The possibility of a recession and lasting geopolitical tensions could also be major supporters of the gold price.
- Some market analysts see gold reaching between $2,500 and $4,000 per ounce, while others make a less extreme prediction of $1,900 an ounce.
Stay tuned for our own physical precious metals price forecast by our colleague Nicky Shiels, Head of Metals Strategy at MKS PAMP GROUP.
