As per tradition, we are embarking on predictions for 2023. However, it is important to note that a precise prediction of gold and precious metals prices is practically impossible. All we can do is observe the ongoing trends and derive insights based on how gold has performed historically.
Gold Predictions for 2023: What’s Happening in 2022
Observation and reflection, coupled with a sound financial education, are the most powerful tools we have when making investment decisions. This holds true for gold as well (although it’s always wise to include it in your investment portfolio), as one must understand it to fully benefit from its potential. Let’s start with the keen observations made by Maurizio Mazziero in the last Oronews from November 2022:
“The highs this year were marked on March 8 at $2,079, just shy of the 2020 historical record of $2,089 per ounce. From that point, in line with equity markets and bond values, prices began to fall (…) From the end of September to the beginning of November, prices began a fluctuation that led them to form a triple bottom near $1,620 per ounce.
Everything changes – not just for gold, but also for stock markets – on November 4th when prices rebound and mark three sessions of substantial increases from $35 to $50 per ounce each day, pushing prices up to $1,780 per ounce. From here, prices seem to want to retrace their steps, and it’s likely that they will, as is normal to witness when there are strong increases in a short time (…) One might wonder what has changed to witness such a reaction that makes us think that the weakness has ended. The reason lies in the latest U.S. consumer price data that shows a decrease in annual inflation both in the general index and in the Core index, excluding food and energy goods. The reduction in inflation has galvanized stock markets which have begun to anticipate more limited FED rate hikes. This shines a light at the end of the tunnel for gold, which as we have often expressed, competes with bond yields, whether rightly or wrongly considered risk-free. The fact remains that in 2022, for euro investors, gold was the only positive asset with a return of around 5%.”
Gold Prices: Predictions and Trends for 2023
Inflation may play a central role in the bullish trends of gold throughout 2023. Rising prices have allowed gold to absorb the strong bullish period of the dollar: as we know, gold prices are inversely proportional to the strength of the greenback.
Looking at the value of gold over the past 30 years, it’s evident that in periods of high inflation (with a price increase greater than 3.5%), gold gained an average of 9% annually. On the other hand, the appreciation of the dollar during that same period has led to significant losses in gold prices. However, today’s recessive period looming on the horizon also contributes to the resilience of gold.
This has led various analysts to speculate that in 2023 gold could return to levels very close to $2000/oz: inflation will remain, according to projections, well above 5%, but if the FED were to stop raising interest rates and this led to even higher inflation, the price of gold could even surpass $2000/oz.
Gold and Precious Metals Predictions for 2023: How to Invest Wisely
Without certainties, what to do? Invest in gold or bet on BTP Italia, which is promising much these weeks? Or, aim for the financial markets? We have previously discussed how to invest with awareness, leaving some valuable advice. As before, we strongly recommend not to improvise. A wise thing is first of all to rely on a good independent consultant and continue to train and inform oneself.
Secondly, when there are no certainties, the best thing is to minimize risks and maximize profits. Gold is perfect in this case because it is the quintessential safe haven asset and never loses its value (in fact, it can never be worth zero). Owning physical gold, in any of its forms, from ingots to investment coins, is always a good strategy. How much? There is no definitive answer. As we always say, the important thing is to have some.
Another intelligent strategy to get the most from one’s investments is to have an Accumulation Plan, an investment program that involves small or medium periodic investments. The advantages of this investment strategy lie in the flexibility and accessibility of the instrument. The Accumulation Plan is indeed the ideal tool for those who can invest periodically modest sums for medium-long periods and wants to limit the negative effects of typical market volatility; it is, for instance, the main strategy of those who want to build a supplementary pension.
With an Accumulation Plan in grams of gold, it’s possible to gain all the benefits of a classic PAC, without its disadvantages, and with the added benefits of physical gold.
Even in view of a bullish 2023, periodic purchase becomes essential to exploit the moments of strength of gold and minimize the effects of inevitable moments of volatility.
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