Expert Opinions – Will Gold and Silver Prices Stop Bullish in 2023?

• Gold prices are likely to remain under pressure due to interest rates remaining high
• Expert: Commodities are at the beginning of a supercycle
• Silver supply meets China’s rising solar demand

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Is the gold price hitting the brakes?

The gold price will be held back in the longer term by the Fed’s monetary policy stance. Heraeus analysts recently said gold would need a less restrictive Fed to rise, according to Kitco. “The scatter plot of Fed members shows that most of them have a final Interest rate increase this year, with an upwardly revised expectation of where interest rates will remain over the next 24 months. As always, it will be important to pay attention to what they do and not what they say, as the Fed’s interest rate forecasts are rarely accurate,” said the experts. Even if market participants do not expect any further interest rate rises in 2023 However, analysts warn that markets are unlikely to cut any time soon. “It is more likely that interest rates will remain high until next year, meaning gold prices are likely to remain under pressure.” .

According to “News to Go”, financial analyst Folker Hellmeyer points out that interest rate fears play a significant role in the development of precious metal prices. Risk aversion is being caused in the financial markets by rising yields on US government bonds and uncertainties in the US budget. According to him, gold and silver could therefore benefit from being “safe havens”.

Commodities in a super cycle?

Analyst Mirko Kohlbrecher from asset manager Spiekermann & CO AG is of the opinion that a new supercycle for raw materials has begun in 2020. It relies on the CRB index from Reuters and Jefferies, which contains various raw material components. According to Kohlbrecher, this index rose significantly between April 2020 and May 2022, ending the downward trend of the previous twelve years. Historical analysis suggests that this current supercycle could continue for a few more years and is only in its early stages.

However, the ongoing upward trend is not explained solely by historical factors, as the expert emphasizes. There is also a clear imbalance between supply and demand, which should further drive up raw material prices. It is expected that the high demand for fossil fuels and precious metals cannot be fully met in the short term. Covering demand in the long term is also difficult because production cannot be expanded immediately.

Silver supply sufficient for China’s solar demand

According to Kitco, Heraeus analysts note that Chinese solar demand is being revised upwards, which is why an ever larger percentage of silver supply is being absorbed. “Chinese solar capacity reached half a terawatt in August, after adding the equivalent of all U.S. solar capacity (133 GW) this year. The manufacturing base in China is growing rapidly, and growth will likely be faster than saving silver “Lower loadings can be achieved, which will lead to a predicted increase in demand for solar silver this year,” explain the experts. China’s demand for silver could reach a record level this year. Solar silver demand is forecast to exceed 165 million ounces (25 million ounces more than in 2022). However, despite these optimistic indicators, analysts believe that the overall supply of silver can meet demand. This will therefore keep the price increase in check: “Despite a significant increase in demand, the price of silver does not correlate well with industrial demand, and above-ground stocks of the metal will be able to meet the greater demand if mining supply cannot.” .

Editorial team finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

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