Gold price soars to six months high, analysts are confident that the rally would continue in 2023. Before it eases off to trade around $1.838 per ounce, gold peaked below $1.850 per troy ounce. In the U.S. gold futures also soared for more than 1% which is $1.844. Gold prices have been challenging since November last year following market turbulence and rising recession expectations. Ole Hansen, head of commodity strategy at Saxo Bank argued that the institutions are looking for more friendly prices in 2023. Gold prices follow recession as well as risks in the stock market valuation.
The peaked central bank rates are eventual, then there is a combined prospect of inflation and weaker dollar. So, it would be hard to expect the 3% level by the end of the year. Furthermore, some central banks have seen de-dollarization last year when a record amount of gold was bought look set to continue. Therefore, it could provide a soft floor in the market. Foreseeing the future, Hansen suggested that gold key events should be unmissable. It would be following the latest U.S. Federal Reserve meeting.
Hansen also mentioned that gold would be looking for resistance at $1850 and $1878 next. But will it be the new all-time high in 2023 for gold? According to strategists, the full dovish pivot from central banks will not impact much on gold prices. However inflation seems to remain more than the target range in many major economies. In addition, due to the slow growth of the economy and possible recessions, central banks ease off the aggressive interest rates.
