What to expect from gold prices in 2023, and how long will the precious metal continue to fall?

In 2022, a paradoxical situation has developed in the precious metals market: while demand for physical gold is growing, the price of futures contracts on the exchange continues to fall.

Historically, it has been generally accepted that precious metals begin to appreciate in value when inflation increases, armed conflicts occur, and economic instability increases.

But 2022 has overturned all the rules that have guided exchange trading for years, with the metal price behaving in an unusual way.

While gold reacted predictably at the start of the military conflict in Ukraine, its price has now fallen below 2021 levels.

Today, gold futures are trading at $1,647 per Troitsk ounce. On the one hand, this is quite an attractive price, as the metal cost over $2,000 at the beginning of the year. On the other hand, it's worth remembering that in 2020, the price was $1,440.

Therefore, it's safe to say there's still room to fall, and $1,600 isn't the bottom yet. Current gold price - https://time-forex.com/kotirovki

What will determine the price of gold in 2023?

Primarily, it depends on the exchange rate of the US dollar against other global currencies. Currently, there is a noticeable inverse correlation between the US dollar and gold:

The chart clearly shows that gold has been falling in price for six months, while the dollar has been rising. For this reason, it's much more profitable to invest in US government bonds than to lose money due to the falling price of gold.

The second reason why gold is likely to fall in price in 2023 is the global economic crisis. People and countries simply don't have the spare cash to save, so all their resources are being spent on essential needs.

In addition, the market is under pressure from an excess supply of metal, which even sanctions against Russia, which have limited gold supplies from that country to the global market, have failed to contain.

Based on the current situation, we can predict the price of gold in 2023 to be in the range of $1,500 to $1,700 per ounce, as there are no visible reasons for the precious metal to rise in the near future.