At the beginning of trading in the new year 2023, the price of an ounce of gold, XAU/USD, remained on its upward path. This concluded the trading year of 2022, and recorded the level of $1825 an ounce, near its highest in six months.
The decline in the price of the US dollar and the demand for the yellow metal as a safe haven was amid pessimistic expectations for the new year. In this regard. The Managing Director of the International Monetary Fund, Kristalina Georgieva, warned that the global economy is facing a “difficult year, even more difficult than the year we leave behind.” “We expect a third of the global economy to be in recession,” Georgieva told CBS’ “Face the Nation” in an interview broadcast on January 1. Why? Because the three big economies — the United States, the European Union, and China — are all slowing down simultaneously.”
The International Monetary Fund had already warned in October that more than a third of the global economy would contract and that there was a 25% chance of global GDP growth of less than 2% in 2023, which is defined as a global recession.
Examining the three largest economies on CBS, Georgieva paints a mixed picture of their ability to weather an economic downturn. She said that while "the US may avoid a recession", the EU "has been hit hard by the war in Ukraine - half of the EU will be in recession next year". Meanwhile, China is facing a "difficult year". "This translates into negative trends globally - when we look at emerging markets in developing economies, there is an even more dire picture," she added.
However, the outlook for the world's largest economy may provide a respite. "If the US labor market remains resilient, the US will help the world get through a very difficult year," Georgieva added. And on the other hand. Stock markets started the new year on a mixed note, with European indices opening higher on Monday after a lackluster session for a few Asian markets that did not close for the New Year holidays. US markets are also closed.
2023 Begins with Doubts
This week brings employment data and minutes from the Fed's latest meeting, as it begins 2023 with lingering doubts about the war in Ukraine and about the risk that higher interest rates will tame inflation into recession.
By performance, the German DAX index rose 0.5% in early trading to 13996.02 and the CAC40 index in Paris rose 0.7% to 6520.71. Markets in Britain and the United States are closed on Monday for the New Year's holiday. Concerning Asian stock markets, the Kospi Index in South Korea fell 0.5% to 2225.67, and the Sensex Index in Mumbai rose 0.4% to 61109.23.
Over the weekend, a report showed that Chinese manufacturing contracted for the third consecutive month in December, in the biggest decline since February 2020, as the country grapples with a nationwide surge of COVID-19 after anti-pandemic measures were suddenly eased.
The monthly PMI fell to a reading of 47.0 from 48.0 in November, according to data released by the National Bureau of Statistics on Saturday. Numbers below the 50 level indicate a contraction in activity. Overall, it is uncertain what impact the removal of strict COVID-19 policies that have hampered the production of raw materials and commodities and discouraged travel will have on the global economy. The specter of a recession in the US and other major economies, as well as a prolonged slump in China, are factors exacerbating the markets.
XAU/USD gold price forecast today:
- The XAU/USD gold price is still on an upward path if it is stable above the psychological resistance of $1800 an ounce.
- Stability above it will remain important for the bulls to control.
- Resistance levels at 1818 and 1833 dollars an ounce identified important levels for the trend.
- The technical indicators moved towards overbought levels, and from the last and higher levels, it is better to think about selling gold, pending profit-taking sales.
On the other hand the direction of XAU/USD gold will not change to the downside without moving towards the $1775 support. The price of gold will be affected by the level of the US dollar, the future policy of global central banks, and the course of the global economy in the new year.
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