The yellow precious metal is now on its way to ending the outgoing 2022 near the initial price of $1,805 per ounce. Several negative factors have combined to negate many of the traditional tailwinds favoring gold. As investors opted for the precious metal as a hedge against decades of inflation, a strong US dollar prevented the price of gold from doing much better.
However, as explained by Brian Leney of Junior Stock Review, this is not the case with gold in other currencies. “The strongest trend against gold this year has undoubtedly been the strength of the US dollar,” he explained. “Given that, the price of gold has been good or held up well in every currency I can think of other than the US dollar - that's the reason to own gold. I think over time, gold will rise in price in dollar terms as well.”
Fighting rampant inflation has become the most important issue in the US economy in 2022. The fight against inflation began in the country in the second half of the year after inflation reached a nearly 40-year high in June. In October, inflation fell to 7.7%, the lowest level since January, prompting speculation that the Fed's interest rate policy could be cut. “A reversal of the Fed's policy would be a major turning point for the price of gold,” Leni said. “Honestly, I think the turnaround in the price of gold has already happened. We see it now."
In the new year 2023, Leni will follow two important news. "First, the news of the Fed's policy change should be a big turning point in the perception of precious metals for investors in the precious metals market," he said. "I think it should be on everyone's lips globally." The second event will be the events on the territory of Ukraine. “News about the military conflict between Ukraine and Russia, good or bad, can have a big impact on the direction of the market and the speed of money,” Leni said. “I think 2023 could be a much better year for commodity investors.”