Gold Price Outlook – September 2023

“Gold prices are expected to remain at elevated levels for the remainder of 2023, with strong support for prices at the $1,915 level. Prices could retest the record high levels reached earlier in 2023 as the year progresses: The fundamental, and the economic and political issues that led investors to buy gold at the start of this year remain in place (with the exception of cyclically low gold prices that emerged in the final months of 2022, into early November).

Economic growth has been healthy so far this year but could begin to soften as the year progresses. In the absence of any supply side shocks similar to those seen during the pandemic and post pandemic period through 2022, softening economic growth should help bring down inflation. Drastic weakness in inflation is not expected, but signs of continued softening should hold central banks off from further significant tightening of monetary policies. If this scenario plays out gold prices should be expected to move sideways to higher over the next four months.

There is a lot of uncertainty in the markets, however, and if economic growth does not slow sufficiently to lower core inflation it could result in central banks tightening policy further. This could cause gold prices to soften toward the $1,900 level and a break to $1,880 ought not to be ruled out. That said, even if gold prices were to soften to these levels, gold still is at historically elevated levels.

Furthermore, in addition to economic growth, inflation, and monetary policy there are other factors that are influencing gold, and which are expected to be positive and supportive of gold prices and investment demand such as the recent downgrade of U.S. government debt, the upcoming U.S. presidential election, and the slowing in Chinese economic growth.”