1. Market review: Spot gold soared to US$1,928.95/oz in early trading in the Asian market, then fell back below the US$1,920 mark, and closed down 0.22% to US$1,916/oz. Spot silver managed to hold the $24 mark, closing up 0.04% at $24.29 an ounce.
2. Economists from the rating agency Moody’s stated that the GDPs of Germany, Italy and Slovakia will all be lower than pre-pandemic levels in 2023. Moody’s expects the sovereign credit outlook for the euro zone to be negative this year, saying the region faces a “moderate recession”. Two-thirds of the chief economists surveyed expect a global recession in 2023, according to a report released by the World Economic Forum (WEF) on Monday.
3. Tesla CEO Elon Musk recently once again criticized the Fed’s aggressive interest rate hike policy. He said that the higher the Fed raises interest rates, the harder it will fall in the future.
4. New Zealand Economic Research Institute: 70% of companies expect the economy to deteriorate; New Zealand business confidence has dropped to the worst level since the 1970s. This may imply that the risk of a global recession is rising.
Bank of America
It’s too early to call gold dead
Interest in gold has been low in recent quarters compared with other asset classes, partly because rising real interest rates and a stronger dollar have not provided an impetus for increased exposure to the metal. And the market is paying more and more attention to the role of metals in the energy transition, but gold is not one of the metals that is important for future technologies. But we think it is too early to call the death of gold. First of all, gold miners are increasingly discussing the benefits of switching to copper mines. Our equity research data also shows that some senior gold miners have entered the base metal field. is the pillar. Second, gold is turning bullish as a lower dollar and bond yields provide a macro tailwind for gold, and our analysis confirms that gold can be a powerful portfolio diversification tool in the future. Therefore, it is expected that gold may be pushed above $2,000 an ounce in the coming months.
Gold prices may rise too fast in the short term
Retail demand for gold bars and coins will remain strong, driven by a recovery in economic growth in China, the world’s largest consumer market; however, gold prices may go too far too fast in the short term and require a downward correction if prices fall from current levels to In the range of 1870-1900 US dollars, the upward trend of gold may be reversed. It is worth mentioning that if the price of gold falls below $1800, it may fall further to $1730
A break below this mark will trigger more selling
Gold is now overbought, but the demand trends underpinning its strong performance remain firm, and we don’t expect CTA trend-following funds to further intensify buying activity as long as prices stay below $1,990. However, a close below the $1,917 range could lead to some quant unwinding, but only if the price breaks below the $1,865 mark will trend followers trigger more selling.
$2100 in gold is also possible
As the pressure on gold from the U.S. dollar and U.S. debt eases, investors may choose to buy gold to hedge against inflation risks and economic turmoil. It is expected that the price of gold may easily break through $2,100 an ounce before the end of the year. Generally speaking, gold is considered a safe asset to store wealth, but the current excessive intervention of central banks may make the risk of global recession high.