After beating Bitcoin in 2022, many investors wonder whether 2023 is the time for gold to shine. Last year, central banks accumulated 663 tonnes of physical gold in the first three quarters, making it one of the biggest buying sprees among central bankers (even with no data available for Q4 yet). Overall, the gold market experienced a relatively good year compared to the rest of the market, which saw significant declines across the board. Furthermore, the stock market's uncertainty and the prospect of a recession in 2023 helped to drive gold demand substantially higher from the preceding year (2021).
As a result, we continue to be bullish on gold. However, we are worried that if the stock market starts selling again, it might put a temporary lid on the price of XAUUSD. In addition to that, large holdings by central banks give them the firepower needed to dampen price increases if necessary. Due to that, we will stay cautious and observe market developments very closely in the coming months. We will be vigilant around FOMC meetings which are planned for the following dates in 2023:
January 31 - February 1
March 21 - March 22*
May 2 - May 3
June 13 - June 14*
July 25 - July 26
September 19 - September 20*
October 31 - November 1
December 12 - December 13*
(*monetary policy decision)
Illustration 1.01
Interestingly, in November 2022, gold returned to the wide range that it constituted in 2021 (and stayed within for the most part of that same year). Then today, it broke above it, which is bullish. We will watch the gold’s ability to hold above the range's upper bound. If gold manages to hold above this level, it will bolster the bullish case for it.
Technical analysis
Daily = Neutral/Slightly bullish
Weekly = Bullish
Illustration 1.02
Illustration 1.02 shows the daily chart of gold’s RSI. To further support a bullish thesis, we would like to see the RSI resume a rise and break above 70 points.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
As a result, we continue to be bullish on gold. However, we are worried that if the stock market starts selling again, it might put a temporary lid on the price of XAUUSD. In addition to that, large holdings by central banks give them the firepower needed to dampen price increases if necessary. Due to that, we will stay cautious and observe market developments very closely in the coming months. We will be vigilant around FOMC meetings which are planned for the following dates in 2023:
January 31 - February 1
March 21 - March 22*
May 2 - May 3
June 13 - June 14*
July 25 - July 26
September 19 - September 20*
October 31 - November 1
December 12 - December 13*
(*monetary policy decision)
Illustration 1.01
Technical analysis
Daily = Neutral/Slightly bullish
Weekly = Bullish
Illustration 1.02
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
