Will the gold face a quick fall
Gold appears to be facing a challenging route in 2023, and this is what most of the experts who see the yellow course of the new year are collecting, as the British Research Company Metals Focus expects the average gold prices to fall by 10% in 2023, reaching some $1,500 per ounce sometime during the year.
The ANZ banking strategies also expect yellow metal to be under pressure in 2023, and the most pessimistic group among experts in their expectations say that gold will fall rapidly over the coming year.
The consensus on the decline in gold in 2023 raises questions about why experts are so pessimistic.
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According to the Executive Director of VI Markets in a recent “Arab Sky News Economy,” analyses and pessimistic expectations of pressure on gold prices in 2023 are based on the US interest-raising trip to counter inflation, as the US Federal Reserve is expected to continue to raise interest to 5 or 5.5 percent targets, which will create further pressure on gold prices owing to the adverse relationship between the gold price and the interest rate.
He explains that when interest increases, investors and significant investment funds start to simulate their investments and convert them into a cash dollar to be placed in banks and to benefit from high-interest levels, noting that gold and equity are among the fastest investments that can be sifted and converted into dollar liquidity.
In my opinion, the gold price projections of the Research Centre are based on the fact that real inflation will rise in 2023, indicating that there is a risk that the federal reserve may not be sufficient at 5.5 percent for interest if it is observed that inflation has not reached the target of 2 percent, and that will therefore reflect a further decline in gold prices next year.
The consequences of the problem persist.
For his part, the expert on financial and economic guidance, in a recent “Arab Sky News Economy,” says that the fall in gold prices in 2023 and the arrival of $1,500 per ounce is not excluded because of the inflation crisis of the world economy and the steps of the world central banks to raise interest, noting that the absolute magnitude of the problem of the world economy will emerge in mid-2023. The consequences for gold prices will continue to emerge.
That what is happening with gold is normal. Looking at the previous graphs, we find that in similar situations and throughout history, gold reacted downwards to return and continue its upward trajectory at a later stage.
According to Harsh, the fall in gold prices never meant that it was not a haven, recalling what happened with the imposition of closures due to the spread of Corona in March 2020, where gold fell from $1,700 to $1453 per ounce in three weeks, returning and rising at the beginning of April 2020 to a level of $2075 per ounce in August 2020.
The dollar will record the most significant weekly decline against other major currencies since July, affected by the increased prospects of lowering US interest rates next year.