Rate-hike pressure depresses gold for second year running

However, gold prices have risen nearly $200 from a more than two-year low hit in September and were on course for their best quarter since June 2020, on hopes that the US central bank might slow its pace of rate hikes.

The Fed raised interest rates by 50 basis points (bps) in December after four consecutive increases of 75 bps each.

Higher rates increase the opportunity cost of holding gold as it pays no interest.

“In 2023, gold prices will see a lot of volatility but won’t move much farther as they will be stuck between a stronger dollar and lowering Treasury yields,” Spivak said.

“If recession hits industrial demand in 2023, then platinum and palladium will likely suffer.”

Spot silver rose 0.4% to $23.97, platinum was flat at $1,054.86 and palladium was little changed at $1,814.75.

Silver and platinum were both headed for a yearly rise, while palladium was headed for an annual decline of 4%.

Reuters