Mahmoud Al-Arabi_Gate of Economy
A report released by Gold Bullion predicts that gold’s performance in 2023 will be much better than in 2022 due to increased demand from central banks and potential ongoing geopolitical tensions. There are 4 factors that make 2023 l year of gold, perhaps the most important of which is the tendency of central banks to buy gold. , limited supply of gold from new mines, interest rates and a weak dollar.
The report touched on the four reasons supporting gold in 2023, including that central banks around the world, especially in China, Turkey and India, are buying gold at a record pace, and this trend has continued over the past few years. 13 consecutive years. , but its pace has accelerated recently. According to the World Gold Council, central bank demand for gold to date is 673 tons, surpassing all yearly totals since 1967!
According to a report from the World Gold Council, central bank purchases are largely driven by flight to safer assets as inflation rises in 2023, which could contribute to a rise in gold prices.
The Gold Billion report added that limited gold supply from new mines is supporting rising prices, as gold mining accounts for about 75% of the annual gold supply, so gold availability is largely dependent on measure from mineral production. In recent years, it appears to have peaked in 2018, and according to the World Gold Council, total gold supply has increased slightly (by 1% year-on-year) to 1,215 tonnes as of Q3 2022.
Gold Bullion said the Federal Reserve’s trend of raising interest rates at the fastest pace in history during 2022, to post interest at 4.5%, is expected to continue through the end of 2023 as interest rates are considered one of the main factors that can influence the demand for gold. It could influence the attractiveness of gold as a store of value or as a hedge against inflation. When interest rates are low, investors are more likely to buy gold as a safe haven, which could drive up its price.
As for the fourth factor supporting gold, it is the weakness of the dollar, as gold prices and the value of the US dollar tend to move in opposite directions of an increase in gold prices.
