The price of gold could skyrocket up to $ 2,280.  per ounce in 2023, the MUFG predictsThe price of gold is having a hard time going back to $ 1,900. per ounce after it fell below that level in early May. However, analysts from the Japanese investment bank MUFG are convinced that this is only a temporary discount before the rally they forecast of up to $ 2,280. per ounce in Q1 2023.

Gold could reach historic highs within a year, MUFG analysts believe

Gold remains under pressure from the appreciating dollar. The US currency index (DXY) hit 20-year highs as a result of hawkish actions by the Federal Reserve. The yield on US 10-year government bonds also rose to local highs.

– The threat of a downturn is an important foundation for gold as some investors look for safe-haven assets and avoid the more risky ones. – MUFG analysts noted.

The gold supply is returning to stable levels in the wake of the pre-pandemic confusion.

Gold mining in mines is expected to increase by as much as 2% this year, prolonging the 3% increase in production from 2021, which signaled a return to pre-virus disruption, MUFG experts forecast.

TradingView Chart
Spot gold rate. Source: tradingview.com

– In addition to the continuation of recovery from the COVID crisis in China, Peru and artisanal mining, the expansion of the Grasberg mines by Freeport and Obuasi by AngloGold, the increase in production at the Ahafo mine by Newmont, and the restart of the Porgera mine in Papua New Guinea may contribute to an increase in gold supply. . – MUFG analysts noted. – Only Russia may see a significant drop in gold production due to sanctions-related restrictions on financing and sourcing equipment.

According to the MUFG forecast, gold prices could reach $ 2,280 an ounce in the first quarter of 2023.




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Silver will follow gold

Like gold, silver remains in a downward trend due to the same macroeconomic factors such as a moderate dollar appreciation and an increase in profitability.

– In the medium term, silver should benefit from the energy transition demand, especially when used for solar energy. However, given the wider threats to global economic growth in a context of rising interest rates, the short-term outlook may be more challenging. – MUFG analysts commented.

Also check: Brent crude oil could go up to $ 141. per barrel, the MUFG forecasts

Looking ahead, we believe silver will be slightly outperforming gold thanks to stronger industrial demand, and more broadly, it will benefit from a move towards precious metals as a defensive asset in stagflation conditions. – they added.

The MUFG forecast assumes an increase in the price of an ounce of silver to $ 30. in the first quarter of 2023.

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