If you caught our mid-week Gold Bullion Bulletin on Wednesday, you’ll know that gold’s star is shining brighter than ever with expert after expert clamouring to share their record-breaking predictions for the precious metal. There is little doubt that 2023 will be the year that we see all new highs set by the bulls. Gold has already enjoyed its best January in more than a decade and has gained over £81($100) since the beginning of the year.
We also know that recession is now inevitable, and the U.S. dollar continues to struggle to find any kind of momentum. That said, if you have been waiting for the optimal moment to buy gold, it has arrived in the form of a window to buy that has inched open this week – but you’ll need to move quickly to take advantage of this opportunity before it slams shut.
This chance to buy comes thanks to the latest data from the U.S. Bureau of Economic Analysis. Released yesterday (Thursday), the figures show that the economy performed better than had been expected in the final quarter of 2022, with a 2.9% increase in GDP. While this is still a decline on the previous quarter, which shows that a slowdown is taking place, the drop off wasn’t as sharp as economists had feared. A figure of 2.6% had been expected.
Although consumer spending was also lower in the period October – December compared to July – September, the figures provided some respite for Wall Street, which is fully braced for an incoming recession. These figures saw gold prices toppled from the nine-month high achieved earlier in the day on Thursday. The yellow metal declined from £1,571 ($1,949) to £1,552 ($1,925).
Make no mistake, this lull in gold prices is temporary. Speaking to Reuters, senior gold trader Tai Wong said, “While gold is still somewhat pressured by the fact that the data has given the Fed room to be higher for longer, on the other hand, concerns about a slowdown, especially with recent headlines on layoffs, are limiting the downside. This is giving bulls the momentum backed by strong technical moves in the past couple of months.”
Katherine Judge, the CIBC senior economist warned that this week’s data shouldn’t be taken out of context, noting “With inventories now elevated across many industries, and consumers running through excess savings, we see the potential for a contraction in the economy in the first quarter as the impact of past rate hikes materializes more fully, and consistent with a tapering off of momentum in recent monthly indicators.”
Don’t wait for prices to shoot back up to new monthly highs. Buy gold now before this window to buy slams shut.
