Gold looks set to end the trading week on a down note with the price now below $1,930 an ounce. However, even with today’s slight dip, gold remains near its highest level in nine months and now looks to be stabilising around that territory rather than this being the start of a sharp fall.
Gold has enjoyed a curious start to the year with the price carrying its impressive performance at the end of last year into January but now having reached such elevated levels, the precious metal looks to have reached its current peak.
With US GDP figures the latest data point to reinforce the theory that the world’s largest economy is holding up well in the face of stubbornly high inflation and rising interest rates, the overwhelming expectation is that the Federal Reserve will only implement a 25 basis point increase to base rates when it meets next week. However, this weakening of the rate hikes by the US central bank has long since been priced into gold so it would take a move that doesn’t conform to expectations to significantly impact the gold price.
For now, gold finds itself trading slightly ahead of the current macroeconomic situation and rather reflects an outlook for 2023 that sees the US economy holding up well and inflation continuing to fall, thus enabling the Fed to stop its rate hikes in the coming months. As such, gold doesn’t represent much of a buying opportunity currently with holders now needing the data to continue to back up the positive outlook that is supporting gold’s high price.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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