Gold prices rose on Friday as data showed US inflation cooling. However, the data wasn’t enough for the Federal Reserve to slow rate hikes. Analysts interpret the market and share their forecasts for gold prices.
“We will see better demand for metals in 2023”
Spot gold rose 0.3% to $1,797.67. U.S. gold futures, on the other hand, were last up 0.5% at $1,804.2. Gold rose about 0.2% during the week, showing its best performance in three weeks. cryptocoin.comAs you can see on , US consumer spending rose 0.1% in November after rising 0.4% in October. Thus, the fall in inflation continued. Kitco Metals senior analyst Jim Wyckoff comments:
With inflation in line with expectations, bets have risen that new speculative purchases and larger funds could move to the long side of gold at the start of the year. Thus, gold prices rose before the new year. Also, we will see better demand for precious metals in 2023. Inflation can still be problematic. However, central banks will start to release gas by mid-year and this will support the metals markets.
“In this case, gold prices will rise”
Quantitative Commodity Research analyst Peter Fertig says gold prices are trading sideways around $1,800. He also notes that the willingness to take a large position in the bullish or bearish direction during the holidays is quite low. However, the analyst states that investors are evaluating personal consumption expenditure (PCE) data. He notes that indications of moderate inflation give the Fed reason not to raise significantly more than it has already done.
Brian Lan, general manager of Singapore-based GoldSilver Central, comments on the developments as follows:
The data show that inflation is somewhat reined in. Gold will rise if this raises expectations that the Fed will slow rate hikes. Gold prices will be less volatile next year. It will probably continue its uptrend with the recession seen in the picture.
“The market is in a mood of intimidation”
Tastytlive head of global macro, Ilya Spivak, evaluates the developments and their impact as follows:
After yesterday’s data, the market is in a mood of intimidation. Ahead of the Christmas holidays, we saw a strong move towards news that wasn’t particularly dramatic due to the low liquidity in the market.
“Gold prices will pull back in early 2023”
The University of Michigan consumer confidence index rose more-than-expected in December, supported by lower gasoline prices and a recovery in equities earlier in the month. Caroline Bain, chief commodity economist at Capital Economics, says the “random mini-rally” in the price of gold is somewhat surprising, given that gold is often perceived as an inflation hedge. In this context, the analyst makes the following statement:
We think that some of the increase in the gold price reflects strong physical demand and/or concerns about the impending recession. Regardless, we expect the rally to slow as the Fed continues to raise interest rates. Also, we anticipate that gold prices will pull back in early 2023.
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