Is 2023 The Year Of The Gold Bull Market? A Look At The Bullion On Larger Time Frames

Zinger Key Points
  • Analysts see gold being boosted this year due to the current economic climate.
  • The commodity is trading in an uptrend on both the daily and weekly charts but hasn't printed a monthly higher low.

The price of spot gold reached $1,850.15 per troy ounce on Tuesday –the highest the commodity has traded since June 17, 2022.

Amid an increased risk of a recession in 2023 and central banks purchasing gold bullion, several analysts have called for even higher prices this year, according to CNBC. Managing director and chief investment officer at Swiss Asia Capital, Juerg Kiener, said on CNBC’s “Street Signs Asia” that he sees gold appreciating drastically this year.

Comparing the bear markets of 2001 and 2008 with the present conditions, Kiener sees similarities.

“In 2001, the market didn’t just move 20 or 30%, it moved a lot, the same in 2008 when we had actually a smaller sell-off in the market and the stimulus coming back in, and gold went from $600 to $1,800 in no time, so I think we have a very good chance that we see a major move,” Kiener said.

“It is not going to be just 10 or 20%, I think I’m looking at a move which will really make new highs,” he added.

Head of commodity strategy at Saxo Bank, Ole Hanson, also sees the current economic conditions as a bullish factor for the price of gold this year. “In general, we are looking for a price friendly 2023 supported by 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 year-end — all adding support,” he said, according to CNBC.

While the SPDR Gold Trust GLD posted a return of just 0.78% in 2022, the year ahead may provide more upside. From a technical standpoint, gold looks headed much higher over the coming weeks and months because the commodity has been trading in a solid uptrend on larger time frames since Oct. 31.

Although pullbacks should be expected if gold continues to climb higher, the bullion has also confirmed a bull market by trading above the 200-day simple moving average (SMA) since Dec. 20.

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The Gold Chart: Gold is trading in a consistent uptrend on both the daily and weekly charts, but hasn’t yet confirmed an uptrend on the monthly chart. For an uptrend to confirm on the largest of the three timeframes, the commodity will eventually need to retrace and print a higher low above $1,614.92, although it looks unlikely to decrease that much at the present time.

  • On Tuesday, gold pulled back from its high-of-day price (HOD) and was looking to print a possible shooting star candlestick on the daily chart. If the commodity closes the trading session with a long upper wick, it could indicate a further pullback is in the cards for Wednesday.
  • If gold closes the trading session near the HOD, it will print a bullish Marubozu candlestick, which could indicate another rally is on the horizon. The commodity could also print an inside bar to consolidate Tuesday’s sharp rise.
  • On the daily, weekly and monthly charts, gold broke up from a descending channel on Nov. 8, which suggested a long-term reversal to the upside was likely. If the commodity continues to trade above the 200-day SMA on the daily chart for a few more weeks, the 50-day SMA will cross above the 200-day, which would indicate a long-term bull market is in the cards, possibly for much of 2023.
  • Gold has resistance above at $1,850 and $1,877.15 and support below at $1,831.12 and $1,794.63.
  • The Weekly Chart

Read Next: Best Gold Stocks Right Now • Updated Daily

Photo: courtesy of Shutterstock.

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