Gold futures ended 2022 relatively unchanged, erasing losses from earlier in the year. The price of the yellow metal enjoyed a huge rise in the fourth quarter, driven by expectations that the Federal Reserve will slow down its tightening campaign in 2023. With XAU/USD gold prices settling at $1800, will the precious metal surpass the $2000 psychological resistance during 2023 trading?
Gold futures rose to $1829.00 an ounce
Accordingly, XAU/USD gold prices recorded a weekly gain of 1.25%, a monthly gain of 0.95%, a quarterly increase of 9.6%, and an annual decline of 0.1%. All in all, XAU/USD gold prices ended the year 2022 at their highest levels in six months.
In the same performance, silver prices, the sister commodity to gold, struggled to stay above the $24 barrier by the end of 2022. Silver futures fell to $24.13 an ounce. Accordingly, the white metal will enjoy a weekly gain of 0.84%, a monthly increase of 3.28%, a quarterly increase of 27%, and a jump of 3.3% in 2022.
In general, metallic commodities benefited greatly from the weakness of the US dollar. And although it surged in the first 10 months of 2022 - up as much as 15% - the US Dollar Index (DXY) pared its gains. The index, which measures the performance of the dollar against a basket of major currencies, rose 7.83% this year 2022. DXY recorded a weekly loss of 0.8%, a monthly decline of 1.02%, and a quarterly decline of 7.7%. Last Friday, the DXY US Dollar Index fell 0.36% to 103.46 from an opening of 103.95.
A lower dollar rate is good for dollar-denominated commodities because it makes it cheaper for foreign investors to buy them.
Gold market indicator
US Treasury market yields were mostly in the green, with the 10-year yield rising 4.4 basis points to 3.879%. The one-month bond yield rose 9.4 basis points to 4.027%, while the 30-year yield rose 5.2 basis points to 3.975%. The recession, which refers to the difference between 2-year and 10-year returns, was about 55 basis points.
Commenting on the performance, Jim Wyckoff, chief analyst at Kitco Metals, said, “The latest inflation data we've seen...shows that prices are starting to cool off a little bit. This is encouraging for the metals bulls and was part of the reason we saw a rally.” And “Weaker US dollar index supports prices, but capping gains is higher yields today.”
Looking ahead, the outlook remains positive for gold prices, says Craig Erlam, senior market analyst at Oanda. “The outlook may look very positive for the yellow metal with central banks certainly approaching the peak of interest rates and the economic outlook somewhat bleak, but in the near term, a correction may be on paper in the absence of another bullish catalyst,” he wrote. As for other metals markets, copper futures remained unchanged at $3.8195 a pound. Platinum futures rose to $1,083.70 an ounce. Palladium futures fell to $1,792.00 an ounce.
XAU/USD gold price forecast today:
In the near term, and according to the performance on the hourly chart, it appears that the XAU/USD gold price is trading within a bullish channel formation.
- This indicates a significant short-term bullish momentum in market sentiment.
- Therefore, the bulls will be looking to ride the current rally towards $1826 or higher to $1833 an ounce.
- On the other hand, the bears will target profits around $1816 or lower at $1809 an ounce.
On the long term, and according to the performance on the daily chart, the XAU/USD gold price appears to be fluctuating within forming an upward channel. This indicates a significant bullish momentum in the long-term market sentiment. Therefore, the bulls will target the long-term gains at around $1845 or higher at $1871 an ounce. On the other hand, the bears will look to pounce on pullbacks around $1794 or lower at $1768 an ounce.
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