Let's see what Ole Hansen, Head of Commodity Strategy expects from gold and silver, demand for them, related companies and commodities - crude oil and gas in 2023.
Having seen gold close 2022 near unchanged despite massive headwinds from a stronger dollar and surging treasury yields, the outlook for 2023 looks more price friendly with recession and stock market valuation risks, an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by yearend all adding support. In addition, the de-dollarization seen by several central banks last year, when a record amount of gold was bought look set to continue, thereby providing a soft floor under the market.
Central bank demand may soften from last years record level but overall it will be sizable, thereby supporting the price action We see flows into ETF's and Investment funds reverse higher following the drop last year, and together with CB demand should ensure a strong year for precious metals
Given Peter's overall projection for a continued drop in stocks, together with rising costs towards materials and salaries, we see the mining sector potentially struggling to outperform the expected return from holding a direct investment in gold or silver.
Natural gas prices in Europe and the US may in the nearterm struggle to find upside momentum with inventories staying elevated due to mild winter weather and consumers curbing demand. In crude oil we see a weak Q1 due to recession risks and a slow recovery in virus hit China, being followed by a renewed strength, primarily driven by a recovery in China the US avoiding a recession and continued sanctions against Russia reducing its ability to maintain current production levels. Following some potential sub-80 price action in Q1 we see Brent recover to trade in a 90-100 range into H2
