Gold rate forecast for 2023

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To correctly predict the movement of gold prices, you need to analyze the factors that influence the number of people willing to buy or sell this precious metal. Including technical analysis. Let’s try to figure out what the forecast for the gold price will be in 2023 and how much it will be sold for over the next 5 years.

What fundamental factors influence the gold price?

At the global level, the price of gold depends on:

  • From the global economy.
  • From the US Central Bank.
  • From macroeconomic factors. Rates on funds, expected inflation, foreign exchange trade (volume and direction of flows), ratio of imports and exports.
  • From the status of key importers. The gold forecast highly depends on the economic situation in India and China. These are the main buyers of this precious metal.
  • From geopolitical factors. For example, the trade confrontation between China and the United States, the aggravation of their relations, can greatly affect how much an ounce of gold costs. Changes in sanctions policy can raise the price of the precious metal.
  • From the status of key exporters. A third of all gold exported comes from China, Australia, Russia, and Canada.

Technical analysis helps to build a forecast for gold prices based on historical data. For this purpose, indicators and other analytical tools are used. With their help, you can determine support and resistance levels, identify trends and their strength.

An analysis of market sentiment can help you forecast the gold price for the year. The test boils down to studying the number of buyers and sellers in the market. It is determined which of them dominates. To do this, surveys are conducted, social networks and content on those online platforms where traders discuss markets are studied.

Rating Forex comment: it is important to understand that market sentiment is not stable. Even one piece of news can change them to the opposite. Therefore, it can be dangerous to build long-term forecasts on such shaky foundations.

What events have influenced the gold market in recent years?

Investor interest in gold has grown greatly over the past 5 years. It managed to rise from $1,160 in 2018 to a record $2,073 by May 2023. That is, one of the safest financial assets has doubled its value in less than 5 years. This brought it to the top of popular instruments for investing for the long term.

The dollar price of gold rose for a variety of reasons. This was influenced by:

  • freezing of gold and foreign exchange reserves of the Russian Federation;
  • moving away from the dollar;
  • the likelihood of a recession in the US.

Let’s talk about all this in more detail.

Freezing of gold and foreign exchange reserves of the Russian Federation

The precedent of freezing Russian gold and foreign exchange reserves showed that true economic independence can only be achieved by storing gold:

  • in ingots,
  • not abroad.

Therefore, many countries are actively increasing their reserves. The top 3 leaders in terms of asset growth include Turkey, China, and Singapore. Uzbekistan, India, and Iraq are breathing in their backs.

Moving away from the dollar

The 2008 crisis showed the strong dependence of the economies of different countries on the USD. Therefore, many began to look for an alternative, reducing their dollar reserves. Many chose gold for this.

Probability of recession in the US

Macroeconomic problems in the United States have greatly affected gold prices. Inflation was growing in the country, which reached its peak by mid-2022, amounting to 9.1%. Now it has dropped to 3%. But the interest rate is still high. This led to the fact that the price of gold initially increased. Then it began to decline.

The price of gold now (November 5, 2023) has dropped to $1991.9. That’s because high-rate Treasury bonds are seen as an attractive asset even for cautious investors. Therefore, they attracted some of the investors.

Forecast of the gold rate for 2023-2024

Although the stock market has continued to rise since January 2023, gaining 20%, safer gold has also risen. Although logically it should have been the other way around.

Gold is a traditional defensive financial asset. When high-risk markets start to struggle, investors try to get out. Therefore, the cost of an ounce of gold in dollars is rising. This is clearly visible in the graphs. During periods of crisis there is a surge in quotations.

Now economies are growing. Gold should fall in price. But the price is not going down. This is because many central banks began to change their policies towards the gold and foreign exchange reserves. They started buying more gold.

Another factor influencing the cost of 1 ounce of gold in dollars is inflation in the United States. The government has reduced it from the highest levels in the last 40 years to an acceptable 3%. But investors are not confident that the situation will remain stable.

Trade relations between the United States and China are still tense. Sanctions against the Russian Federation are another risk for the American economy.

If supply chains are broken, a number of goods will begin to rise in price. This applies to essential products. When hydrocarbon prices go up, the situation will get even worse.

Because of this, most analysts give a positive forecast for the gold price for 2023. The precious metal will rise in price. By the end of the year, it could break $2,000 per ounce and go further.

The difficult geopolitical situation that will continue next year will support the value of gold as a hedging instrument. Added to this are concerns about rising inflation and a weakening dollar associated with the Fed’s actions. In addition, consumer demand is increasing in China and India. Countries are attracting new investment. This also supports the precious metal.

In 2024, XAUUSD will grow. Most analysts at rating agencies and financial companies think so, but everyone’s numbers are different:

  • UBS expects that by the second quarter of 2024, prices for an ounce of gold will reach $2,200.
  • Bank of America thinks gold will average $1,923 in 2023.
  • Wallet Investor believes that next year an ounce of gold will cost at least $2,000.
  • Economy Forecast Agency is a true optimist. The opinion is this: by April 2024, gold will reach $2,500 per ounce. By the beginning of 2025, it will undergo a smooth correction to $2,000.
  • Coin Price Forecast is confident: by the end of 2023, gold will reach $2030. Then it will continue to grow up to $2100.

In general, for the coming year, gold can be considered as a promising investment asset for different horizons.

Gold forecast for the next 5 years

Analysts agree that XAUUSD will only rise in price over the next 5–7 years. The tempos are called different. Some believe that by 2028, prices for an ounce of gold will reach $2,700. Others say that prices will reach $3,070.

Gold in the Russian Federation

Over the past year, the precious metal has only become more expensive in the Russian Federation. This is clearly shown by the gold price chart from the Central Bank. If in November last year they asked for only ₽ 3,293, now the quotes have reached ₽ 5,933. That is, the cost has almost doubled.

Naturally, such rapid growth was also affected by the fall in the ruble exchange rate. But now it is starting to stabilize. But gold is not trying to get cheaper. It has reached a new level.

To preserve your capital as much as possible, you should buy bullion. Although they come with an additional fee, this still makes them the most profitable defensive asset. If the goal is to make money on price fluctuations, then you should take a closer look at futures and other gold derivatives.

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