Why gold prices may be headed for record highs this year

1.6.23 - More Good News for Gold

Gold last traded at $1,869 an ounce. Silver at $23.89 an ounce.

 -MarketWatch--IMFAC Georgieva expects one-third of the world economy to be in recession this year. That could bolster gold.

Gold recently climbed to its highest prices in nearly seven months, feeding expectations that the precious metal is on track to notch record highs this year, after closing out 2022 with a modest loss.

Gold "noticeably" appreciated by about $200 an ounce from November to the end of last year, and continued that trend in the first few days of January 2023, says Edmund Moy, a former director of the U.S. Mint.

Futures prices for gold GC00, 1.58% GCG23, 1.58%, based on the most-active contract, finished last year with a loss of 0.1%, but posted gains of 7.3% in November and 3.8% in December.

The relative strength of the U.S. dollar and higher interest rates had pressured gold. But since November, the dollar has weakened and the Federal Reserve's interest-rate hikes started to moderate-prompting gold to start making its upward move, says Moy, who is also a senior IRA strategist for gold and silver dealer U.S. Money Reserve.

Whether there is a soft or hard landing for the U.S. economy this year, the global economy is shaping up to have a worse year than last year, he says, and gold "usually rises during a recession, high inflation, or economic uncertainty."