Gold Kicked Off 2023 on the Front Foot, Says World Gold Council

The 6.1% surge in January took the gold prices to $1,924 per Oz.

SEATTLE (Scrap Monster): The gold prices registered modest gain by over 6% in the opening month of 2023. The U.S. dollar has been a significant contributor to the robust start. The continued central bank gold purchases too supported gold price surge, said the Gold Market Commentary published by the World Gold Council (WGC).

The 6.1% surge in January took the gold prices to $1,924 per Oz. A good portion of gold’s performance during the month was attributed to the weaker US dollar, followed by a sizeable 37bps drop in the US 10-year Treasury yield. Incidentally, gold has gained by almost 15% since the net short low in September last year. The rally has been similar to that of the three previous rallies, WGC report noted.

WGC expects many of the contributing factors such as weak U.S. dollar, recession risk, expectations for lower future interest rates, elevated geopolitical risk, high inflation and robust central bank buying to continue in 2023 as well. As a result, gold prices are likely to register modest gains during the year, said majority of analysts in the 2023 LBMA precious metals forecast survey and Bloomberg survey.

Surprisingly, global gold ETFs have stayed on the side-lines during the recent rally in gold prices. Sooner or later, gold ETFs too are likely to follow, WGC said.

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