Demand for gold surged to an 11-year high last year. This is due to large-scale purchases on the back of high activity by retail investors and a slowdown of ETF outflows.
Erste Group Research economists report a rise in gold prices due to negative real yields.
According to experts, an increase in Fed rates has no influence on real yields, which remains at a negative area in the first quarter of 2023. This contributes to the rise in the price of gold. The continuation of the Fed's rate hike cycle and the expected decline in the U.S. inflation rate in the first quarter have a positive effect on real yields, but it will remain in the negative area. Gold will have very strong support until the real yield situation changes.
Experts believe that gold flows as a shelter will increase because of the expected slowdown in global economic growth and lower corporate earnings growth.
According to economists' expectations, prices will rise to about $1,890 in the first quarter of 2023.