Expect gold to play an important role as a key strategic asset in 2023 says the World Gold Council (WGC). Citing an expectation that the year is likely to be filled with uncertainty as a result of monetary policy action and an upcoming recession, the WGC’s global head of research, Juan Carlos Artigas said gold is expected to perform strongly throughout. “Historically, tightening cycles have ended in a recession. The more severe the recession, the better gold does.
“A sharp retrenchment in growth is sufficient for gold to do well, particularly if inflation is also high or rising. A dollar peak has historically been good for gold, yielding positive gold returns 80% of the time (+14% on average, +16% median) 12 months after the peak.
“On balance, gold’s return in the environment that consensus expects in 2023 is likely to be stable but positive.”
Additionally, the World Gold Council notes that gold has performed well in 2022 and has been stronger than other asset classes which sets the precious metal up well for the next 12 months. “Given the headwinds we have seen this year, gold has held up very well,” Artigas added. “Investors who had gold in their portfolio in 2022 would have seen better returns, fewer losses and less volatility. We expect that will continue to be the case in 2023.”
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