In accordance with Bank of America’s outlook for 2023, gold and silver investors may need to be patient, as precious metals may run into difficulties within the first few months of the upcoming year.
Luckily, gold could still have a good outcome—reaching $2,000 before the end of the year, according to official forecasts of banks.
This past Wednesday, there was a presentation held by Michael Widmer, a financial strategist for the Bank of America. In this webinar, he said that he isn’t expecting a raise in prices for gold until later in the year—at least in the second quarter.
He also mentioned that gold will be in a troublesome environment up ahead. It’s not likely that headwinds will subside completely or even just lessen unless the Fed becomes dovish, or at least less hawkish. New buyers may be brought back into the market if we turn away from assertive raises in rate throughout 2023.
Though the market of gold has continued to experience a solid amount of physical demand, it was noted by Widmer that the largest factor that impacts the short-term price is the demand for investment. Unfortunately, the current economic state is not incentivizing investors to keep gold and silver.
Michael Widmer also adds that the current data imply that interest non-commercially has reached only half of the level we saw in the bull market of 2020.
Though the price situation is anticipated to be depressing within the year’s first half, it’s predicted by the Bank of America that a sudden change will occur if the Fed halts the rising interest rates. It’s expected that the price of gold may average $2,000 per ounce by the last two quarters of the year.
When we look at 2024, the Bank of America predicts that gold prices will remain high, but with an average of $2,086 an ounce.
Michael Widmer also further noted that the core doubtfulness that has driven the prices of gold above $2000 this year will stay the same. International tensions stay elevated, inflation stays a threat in economics, and the current energy issues are threatening to steer the world economy to a recession.
He says that when the Fed holds off on increasing interest rates, we’ll see a solid rise in gold prices.
The Bank of America observes the rate capping somewhere between 5.00% and 5.25% before March, but only when the Federal Reserve stops hiking the rates.
Simultaneously, Widmer can see the Fed reducing interest rates before December of 2024.
In accordance with gold, the Bank of America is additionally bullish with silver. The prices may push up to $25 per ounce before the last quarter, and then stay high throughout 2024.
Along with gold, the silver market is struggling with weak demand of investment, which is ultimately due to increasing rates of interest.
Though a potentially upcoming slowdown in economics may stop silver from outdoing gold within the next year, Michael Widmer says that what’s helping underpin the current market is actually just solid demand.
As countries search to improve their green energy, the silver demand within the solar power industry will continue to expand. He also stated that demand for silver within the auto industry will likely increase constantly from 2023 through 2026.
Widmer says in his outlook report that investors often observe silver through both a macro and micro lens. Looking at the macro side, a USD stabilization and pivot with the Fed might make precious metals more appealing. On the other hand, an industrial offtake stabilization may be beneficial on the micro side.
Recommended for you: Gold IRA Rollover Guide and Silver Investments.
Categories:
US Gold Market
Get Your Free Gold IRA Investor Kit & 7 Blunder Report
Free Investor Kit 
View Charts
