Gold started 2023 with a gain. In Tuesday's (03/January) evening trading session, spot gold prices rose 0.6% to a six-month high of $1833.69 an ounce.
Meanwhile, the gold futures which can be seen on Comex New York rose by 0.7% to $1838.30. In the other place, the XAU/USD chart showed a 0.33% rise to $1829.57.
At the moment, the market's focus is on the prospects of the Fed's rate hike and the FOMC minutes. Based on a source, these data will be released on Thursday morning tomorrow.
If the minutes reveal that the United States central bank is considering a slowdown in the rate hike rate and ending its bullish cycle, then there will be room for further rise in gold prices. That was said by Ricardo Evangelista, an analyst at ActivTrades.
Gold is Still an Attractive Commodity
Edward Moya of OANDA argued similarly. According to him, gold is still seen as an attractive asset because investors also anticipate the possibility of an economic recession and geopolitical developments this year.
Even if the US Dollar strengthens, gold will not experience any significant pressure. To that end, he expects the price of this precious metal to break through $1900 in the short term.
Meanwhile, analyst Ole Hansen of Saxo Bank projects $1850 and $1878 as the next resistance. That is especially if gold price gains successfully break through the $1842 level.
In general, experts are optimistic that gold will be bullish in 2023. The economic recession in 2001 and 2008 became a reference for experts to estimate the movement of gold this year.
Bullish Rallied is Still Continued
In 2001, the market not only moved 20% or 30%, but more than that. It was the same in 2008 when we experienced a smaller sell-off in the market and stimulus was again poured in.
At that time, gold skyrocketed from $600 to $1800 in an instant. So, the analysts think that they have a really good chance. People are going to see a big uptick, as said by Juerg Kiener.
The precious metal gold was seen still trading higher in Wednesday (4/January) trading yesterday. The bullish sentiment that still dominates makes the demand for this commodity continue to increase.
It is especially at the beginning of this year. As a result, gold again recorded gains at the close of trading yesterday as people could see from the data.
Elsewhere, Euro was Slumped
The euro had experienced a fairly rapid strengthening throughout the end of last year. However, the release of German inflation data triggered the fall of the Single Currency in the first European session trading of 2023.
EUR/USD was mired more than 1 percent to a low of 1.0510s in Tuesday's trading (3/January). Meanwhile, the EUR/GBP subsided more than 0.7 percent to 0.8780s.
A preliminary report from the German Federal Statistics Office stated that the rate of consumer inflation weakened in December 2022. CPI inflation was recorded at -0.8%.
That was for Month-over-Month period, which was much weaker than the market forecast of -0.3% and the decline in the previous period of -0.5%. As a result, Germany's inflation rate was dragged down from 10.0% to 8.6% on an annual basis.
Restriction on Gass Causes the High Inflation
If Germany's inflation rate reflects regional inflation trends, the European Central Bank (ECB) is in danger of failing to realize its plans to be more hawkish by 2023. In fact, it is those hawkish expectations that have squeezed the euro rate at the end of last year.
Bundesbank President Joachim Nagel has previously said that he believes German inflation weakened in December is caused by restrictions on gas and electricity prices.
However, market analysts and other ECB officials gave a sign. They thought that Eurozone inflation remains rising and needs further rate hikes to control it.
