What will happen to the price of the world’s most famous metal, gold, before the end of 2023? Projections and predictions are all over the map, but one thing is not in doubt: the per-ounce price could take some wild swings during the year.
What factors are likely the prime movers behind potential rises and falls in gold’s value? Every decent estimate about near-term chart action begins with a review of the past five years.
While history doesn’t always serve as a perfect prognosticator, the entire precious metal group has behaved in character for the greater part of the past decade.
When the stock market turns bearish, all four precious metals tend to perform well. The reverse is also true.
What are the possible scenarios for 2023 for gold’s per-ounce value movement? Consider the following points about past behavior, the present situation, and probabilities through year-end.
Since 2018: Retrospective Review
From January 2018 until late 2022, the yellow metal’s value bounced between a low of about $1,200 to a level just under the $2,000 mark. That represents a rise, from the low to the high, of more than 66%.
For 2018 and 2019 alone, the low was $1,200, and the high reached approximately $1,525. What about 2020 and 2021, the unique period that included the appearance of a major global pandemic?
Per-ounce pricing was around $1,575 when 2020 began, but soon after COVID spread around the world, it reached very near the $2,000 mark.
Since then, gold has retraced as far down as $1,670 but has pretty much ricocheted between $1,700 and $2,050 for the majority of the previous 24 months.
The First Half of 2023
Those who use an online gold trading platform to do their precious metal buying and selling are waiting to see how the first weeks of the year pan out in terms of political developments, the Ukraine-Russia war, inflation in developed nations, and several other pertinent factors.
After closing out 2022 midway between $1,800 and $1,900, the metal could gain significant momentum if US and European inflation rates hold through the end of March.
As far as the technical indicators go, there is strong support around the $1,700 level and first-tier resistance at the $1,800 mark.
Factors That Might Push Prices Up
A continuation of inflationary pressure in developed nations could serve to buoy values and send the chart line upward.
However, the Ukraine-Russia war is another potent factor that might send more individuals and institutions toward the precious metals as a safe haven amid a lengthening European war.
The military conflict is reaching the one-year mark, which is a psychological point beyond which hope for a quick peace agreement would probably fade.
The Stock Market Factor
The world’s biggest indices, like the S&P 500, enjoyed a long bull market from early 2020 until the last months of 2021.
Then the bottom fell out, and the equities sector in nearly every developed nation started sinking. In the case of the S&P 500, a prime example, index values fell during 2022 from around the $4,700 plateau to just under the $3,750 line.
If those numbers continue to deteriorate and cross beneath $3,500 during the first half of 2023, gold’s price could potentially soar well beyond recent highs.
The per-ounce values could reach $2,000 and go much higher. Whether they have the chance to touch $2,500 or even $3,000 is an open question but not outside the realm of possibility.
China, Taiwan, and the Supply Chain
The communist government of China has been buying up precious metals at a quickening rate for several years. Their motivations remain unknown, but that kind of activity can reveal much about the near-term expectations for precious metals in general.
This could be the year that the communists decide to make a military move on Taiwan, an independent country that China would like to annex. If that happens, look for demand in the precious metal sector to rise significantly.
Not only does a China-Taiwan war include the chance for small-scale nuclear weapons, but such a conflict would mean chaos for the entire Asian Pacific region, potentially destabilizing one-half of the world’s economy overnight.
A related factor that might play into rising demand for all forms of precious metal bullion is the ongoing supply-chain crisis. For more than a year, the international logistics backlog has caused economic problems for dozens of nations.
Gold stands to perform very well, given any of those developments. For the balance of 2023, there is a high probability that the yellow metal could range from a low of $1,700 to a high of $2,500.