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January 2023 Newsletter: Recession Fears Rally Gold, Silver, and Platinum While Bitcoin & Stocks Dip
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Last Updated on: 13th January 2023, 02:45 pm
Gold investors were ushered into the New Year well into the green, with the price of gold above $1,861 per troy ounce, up from a low of $1,769 in early December.
The yellow metal’s rally came on the heels of recent increases in gold purchases from central banks and an uptick in demand from retail and institutional investors looking to hedge their positions amid rising recession fears.
Let’s take a quick look at how the alternative investment market fared over the last 30 days, relative to the U.S. stock market, alongside each asset’s per-ounce spot price as of January 6:
- Gold: +4.1%, [$1,861.04]
- Silver: +4.4%, [$23.78]
- Platinum: +7.4%, [$1,083.24]
- Palladium: (-3.5%), [$1,786.01]
- Bitcoin: (-1%), [$16,814.62]
- Ethereum: +0.5% [$1,259.75]
- S&P 500: (-2.1%) [$3,857.66]
In sum, it was a great month for precious metals investors, with platinum leading the rally with over seven percent gains over the past 30 days.
Gold and silver were no slouch either, posting strong gains north of four percent and continuing their bull run ongoing since early November and mid October, respectively.
Now, what happens if we zoom out? As expected, both silver and gold are in the green over the last 12-month period. Since this time last year, silver is up +3.3% and gold gained +2.3%. This, despite battling a strong U.S. dollar and hawkish Fed policy all year.
By contrast, the S&P 500 index is down (-17.66%) over the same length of time.
For many market watchers, it’s no surprise to see that precious metals have outperformed stocks and paper assets. Gold and silver have long been considered safe haven assets known for their ability to hold value when less resilient assets undergo periods of volatility.
In 2022, numerous macro-level factors supported the price of gold—most notably the Federal Reserve’s monetary policy tightening and interest rate hikes, coupled with global instability brought on by the war in Ukraine. In the near term, it’s unlikely for either of these macro factors to lose their hold over gold prices.
Looking ahead, industry experts remain bullish on gold and silver for 2023.
According to Juerg Keiner, managing director of Swiss Asia Capital, recession fears are likely to take gold prices to new all-time highs in 2023. He isn’t alone in his optimism, either. The manager of the AuAg ESG exchange-traded fund, Eric Strand, sees “Goldilocks conditions” causing the metal’s price to rise above $2,100 per ounce within the year.
If you’re wondering, the Goldilocks conditions referenced by Strand are centered around central banks shoring up their gold reserves, something which accelerated greatly in 2022 and currently shows no signs of slowing down. For Strand, a Fed pivot toward dovish interest rates would only add to gold’s price momentum.
In short, what caused gold and silver to outperform the stock market last year is likely to remain in place over the next 12 months.
There’s no better time than now to strengthen your position in gold. To add gold or silver to your IRA, consider opening an account with any of America’s top-ranked gold investment companies.