Spot gold prices jumped in trading yesterday, Wednesday, to 2032 dollars an ounce, to approach the peak of its historical prices that it achieved in 2020 at 2073 dollars, before retreating slightly in trading today, Thursday, amid expectations that the precious metal will retain its attractiveness.
What are the reasons for this rise? How will the situation be during the current year 2023?
Gold is taking center stage at a time when global inflation problems are causing investors to worry regarding placing their money in asset classes that experience uncertain volatility, in addition to the hopes for good returns on investments are bleak.
A report of the magazine “Forbes” (Forbes) that, following the Federal Reserve (US Central Bank) announced an interest rate hike for the ninth time in a row, gold prices witnessed a remarkable global rise throughout March 2023. Prices are currently witnessing a wave of successive rises.
Why does the price of gold rise?
The report indicated that gold is known as one of the best hedges once morest inflation, and central banks around the world are actively seeking it, as well as investors looking for safer havens than stocks, bonds and currencies to trade in.
The writer pointed out that the rise in gold prices came as a catalyst for many global events during the last period, including political tensions due to the Russian war on Ukraine, high inflation rates and the spread of uncertainty in the stock markets.
What are the expectations for gold performance in 2023?
Analysts believe that gold will continue this performance and will even outperform other asset classes in 2023 in light of the ongoing inflation problems.
The report quoted analysts as saying that gold is moving in an upward trend in general, and that gold prices might re-test their all-time highs at regarding $2070 an ounce, while gold prices are expected to rise in the medium and long term to a range between $2040 and $2080. per ounce.
According to the report, other analysts believe – unlike before – that gold prices will decline, and that the risk-reward ratio is not favorable for gold at the present time, and they also believe that the rise in gold prices came with the support of two short-term events, namely the collapse of the Silicon Valley bank. and the unexpected sale of Credit Suisse to UBS.
Should investors buy gold during 2023?
The report stated that there are many ways in which gold can be bought and invested in, and this depends on the investment goals and the individual’s willingness to take risks.
Buying actual gold may not be the best option, due to its high price, but on the other hand, this rise may be a wonderful opportunity to trade the precious metal through Gold exchange-traded funds, for example, are similar to mutual funds that are traded in stock markets.
Overall, the report showed that it is difficult to predict whether investors should buy now to achieve returns.
