Gold price weighs incoming data and hawkish Fed comments as 2023 quickly approaches gold weekahead
With just one week to go until 2023, gold is down just over 1% year-to-date after a very volatile year that saw the precious metal rise above $2,000 an ounce in the spring and hit lows near $1,630 an ounce in the fall.
Gold could move above $2,000 an ounce in 2023 and"never look back," McGlone added."This is our base case for the precious metal, notably as the Fed shifts from the highest-velocity tightening period in 40 years toward easing … Gold has had an upper-performance hand vs. the industrial metal since 2006, when the U.S. two-year/10-year curve last recovered from a period of inversion," he said.
Markets are trying to put together an outlook for the beginning of next year, with data showing mixed signs of a slowing economy, cooling inflation, and a still hawkish Federal Reserve."Federal Reserve Chairman Jerome Powell has been trying to sell investors a notion that interest rates will have to be higher for longer than previously assumed to keep inflation under control," said CIBC Capital Markets senior economist Andrew Grantham.
The trend market participants are watching is how fast inflation cools down, and growth slows."Data on Friday confirmed that PCE inflation fell further in November, and a new rent inflation series published this week by researchers at the Cleveland Fed adds further weight to our view that inflation will continue falling sharply in 2023," said Capital Economics senior U.S. economist Andrew Hunter.
Next week is a holiday week between Christmas and the New Year, and it promises to be quiet. But the first week of the new year kicks off with several key releases, including nonfarm payrolls, which the Fed is currently monitoring very closely.
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