2023 Gold Forecast
Gold's 2022 was eventful. Gold hit $2070 in March and $1615 in September before rebounding to $1800. Gold's 2023 outlook is broken down below.
Treasury yields prompted gold's recent rebound. Yields have recently started to rise as the Fed signaled it would raise rates above 5% in 2023. High interest rates are bearish for interest-free gold.
At this point, the most important question is whether the Fed will keep rates close to 5% for a long time or will start cutting rates at the end of 2023. Although recent Fed signals have been hawkish, many market watchers remain skeptical that the Fed will be willing to apply significant pressure to the economy throughout 2023.
Gold and U.S. Dollar
Gold's dynamics depend on the dollar's. The dollar had a strong 2022, but it began to lose ground against a basket of currencies in October. If the global economy takes a hit in 2023, money may move into the U.S. dollar, which is bearish for gold.
Will traders buy more gold as a safe-haven asset? In February and March 2022, traders sought safe-haven gold amid geopolitical tensions. Later on, traders weren't prepared to use gold and other precious metals as safe havens due to a stronger dollar and rising yields.
Gold escaped its downward channel in November and is trying to gain upside momentum. Above $1830, gold will head toward weekly resistance at $1875. Gold will head to $1915 if it settles above $1875. A successful test of this level will lead to $1965 resistance.
Gold must settle below $1775 for downside momentum. Below this level, gold will fall to $1730. If gold falls below $1730, it will reach $1700.
Gold in 2023
Gold escaped a strong downward channel and is trying to gain upside momentum. Gold could reach $2000 in 2023 if the Fed isn't too hawkish.
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