Headwinds of investment metals are becoming tailwinds
Gold is again in demand among traders and investors who have found new perspectives as rate hikes are gradually suspending, while bond yields are reducing and the dollar is weakening.
The risk of an economic slowdown is heightened by the flow of weaker economic data, excluding employment reports. This may lead to lower inflation and FOMC policy reversal sooner than expected.
According to the strategist and director of the exchange-trading products department Saxo Bank Ole Hansen, 2023 is going to be advantageous for investment metal prices, which are supported by the economic downturn and stock market valuation risks. Moreover, this year the central bank’s interest rate hike cycle may come to an end. Ole Hansen predicts a weakening of the dollar and continued high demand from central banks.
At the present time, the cost of gold is firmly entrenched at $1,900 dollars per ounce. That mark is already very close to a possible maximum predicted by analysts. That kind of dynamics is driven by noticeable dollar weakening and decrease in the yields of the U.S. government bonds.
27 JanuaryAccording to expectations of strategists of the Internationale Nederlanden Groep, gold will grow in 2023.
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27 JanuaryThe U.S. strategic petroleum reserve (SPR) decreased by more than 40% in two years. The reserves were 371.57 million barrels on January 20, compared to 638.08 million barrels a year ago.
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27 January