The gold market is poised to close the year in a relatively neutral zone as prices hold the $1,800 mark. Analysts predict prices will rise significantly throughout the year and through 2024. So, they are expecting an interesting and exciting 2023 for the gold price.
“I am waiting for $2,100 in the next rally”
Avi Gilburt, founder of ElliottWaveTrader.net, says that gold is poised to rise after a two-year consolidation period. Gilburt forecasts gold prices to rise solidly above $2,000. In this context, Gilburt makes the following statement:
If you don’t have anything nice to say, then don’t say anything. This is how it was for gold. I’m waiting for my time and waiting for the next rally to $2,100.
A long-term perspective for the gold price
Looking at the long-term technical picture of gold, Gilburt says it followed a five-wave rally to 2015 lows. He explains his views on this matter as follows:
We reached the peak of the third wave in August 2020. From then until we bottomed out in early November this year, we basically had two years of consolidation in the fourth wave. Now we’re getting ready to rocket higher in the fifth wave.
Traditionally, the fifth wave has been pretty strong, Gilburt says. He also adds that prices have the potential to be parabolic. “The next pullback will likely be a buying opportunity,” Gilburt says.
Two important headwinds for gold price
cryptocoin.comAs you can follow, the precious metal had a rather disappointing year while struggling to attract the attention of investors. After that, the air rises significantly as we enter the new year. According to some analysts, investors are disappointed in gold until 2022 as it does not live up to its promise to hedge inflation.
In the year we are poised to leave behind, US consumer prices have reached their highest level in more than 40 years. However, due to the inflation threat, the US Federal Reserve had to increase interest rates by 425 basis points. It was also the most aggressive policy stance in 41 years. Rising US interest rates boosted real bond yields. Thus, it pushed the US dollar to a 20-year high. So these were also two important headwinds for the gold price.
Individual investors are waiting for the price of gold north of $ 2,000
However, markets are seeing the Federal Reserve’s tightening cycle come to an end. So these headwinds are slowly starting to subside. Analysts predict the Fed Funds rate will peak at just over 5% in the first half of 2023. The gold market has regained interest as there is light at the end of the tunnel. Meanwhile, gold saw an impressive rally in the last quarter of 2022. With this move, the gold price rose 11% from its two-year low to reach $1,800.
The rise of gold creates a new bull trend among retail investors. Last week, Kitco conducted its annual outlook survey asking readers where they think gold prices will end in 2023. According to the results, individual investors expect gold prices to rise above $2,000, to see new record levels.
Last week 1,213 people voted in Kitco’s online appearance poll. The average price target among respondents was $2,279. On the downside, only 111, or roughly 9% of respondents, said gold prices will fall below $1,800 next year. Retail investors are expecting a much higher rise in gold than most Wall Street analysts and financial institutions.
“There will be more than one pressure pushing gold up”
Bank of America (BofA) is one of the biggest believers in the rise of gold. In its 2023 outlook, the bank predicts the yellow metal will hit $2,000 next year. “Once the Fed stops raising interest rates, there will likely be a good market for the gold price,” says Michael Widmer, commodity strategist at BofA.
However, most analysts are relatively neutral on the precious metal. Accordingly, they expect an annual average price of $1,850. Analysts say the first half of 2023 will likely still be a challenging environment for the precious metal as the Fed will continue to raise interest rates. Most banks think that gold will seriously recover in the second half of the year. Mark Francis, Senior Advisor to the Canadian Stock Exchange, comments:
There will be multiple pressures pushing gold up in 2023. Either lower inflation with lower interest rates or continued inflation driven by grotesque US government deficits, with ongoing global geopolitical turmoil escalating strongly, will reduce the opportunity cost of holding gold. I predict gold prices will rise to $2,224 by the end of the year.
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