With a possible recession coming and interest rates continuing to hike to bring down inflation, it’s hard to tell where the price of gold is going in 2023. Last year, there was just as much uncertainty with gold pricing. At first glance, 2022 was hopeful as we started to recover from the pandemic. However, the war in Ukraine and the energy crisis led to interest rates continuing to skyrocket and have changed earlier predictions for the cost of gold. Our current predictions are based on multiple factors, but it’s important to keep in mind that these are just predictions and anything could happen.
How do you predict the price of gold?
The shortest answer is that you can’t. What we can do is look at past prices and the current economy to make predictions based on trends. The U.S. dollar, inflation and interest rates, and geopolitics are some factors we can examine to see how the price of gold may be affected.
The U.S. Dollar
Since gold is priced in dollars, the current value of the U.S. dollar has a direct impact on the price of gold. Since gold is a commodity with an intrinsic value, that value changes over time. Gold is a direct competitor to other interest-bearing assets since it does not generate interest itself. Therefore, when the price of the dollar is high, the price of gold tends to go down.
Inflation and Interest Rates
Globally, inflation has steadily continued to rise over the last year. Interest rates have been hiked to try to bring inflation back down, but so far, there has been little success. If inflation does somehow start to fall, but the interest rates continue to rise, gold’s value will decrease even further.
With the unexpected war raging in Ukraine, restrictions that have been placed on Russia have greatly impacted the global economy. We’ve already seen strains on gas prices, worries over energy rationing in Europe, and the biggest concern is an impending war that expands beyond Russia and Ukraine. There are no doubts that these geopolitics will also affect the price of gold over the next year.
Get Started Investing in Gold
You may be wondering if now is a good time to start investing in gold. With inflation on the rise and an impending recession, now may be the perfect time to start your gold investment journey. Since gold acts as a hedge against inflation, investing now can guarantee protection from the declining purchasing power of money. Learn more about the different types of gold investments to decide how to get started.
The Current Price of Gold
You can check the current price of gold in real-time here. Always talk to your CPA or Financial Advisor before making investments.