The Value of Gold in 2023

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Gold in 2023:

What is the Value of Gold in 2023? In 2023 (as of the date of this post 12/29/23,) It is going to finish strong around $2000 per ounce! This precious metal had a record-breaking performance year in 2023.

Will this upward trend continue into 2024 and beyond?

Why is Gold in 2023 did so well?

According to this article on marketwatch.com Gold is ending 2023 with a record-breaking run. Here’s why. – MarketWatch, there are several factors at play. 2023 was not a good year for the 10-year treasury note, with recent rates falling to their lowest since July. If people do not like the performance of T-bonds, they look for another way to invest/hold their money. Gold has been a steady bet for that since the Great Recession of 2008. People may not understand what a Treasury bond is, but they know Gold when they see it. As far as stocks go, The S&P 500 and the NASDAQ have been applauded for having a great year in 2023. The S&P 500 looks to finish about 24 percent higher than its performance in the previous year. While the NASDAQ, with the help of the Magnificent 7 Stocks (Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla) will finish 2023 about 43 percent higher than its finish in 2022. The Dow Jones Industrial Average will finish about 13 percent higher than it did last year, which is about a third of the performance that the NASDAQ had this year. As you can see, the Magnificent 7 is a bunch of tech stocks. They did great this year, but tech companies usually go up and down with the feelings of its users. These tech companies have to stay on the cutting edge all of the time to stay successful. But Gold is Gold. It’s a rare metal that is hard to find, but still adored and coveted by millions of people on this planet. That’s why when stocks and bonds go down, the demand for Gold goes up. And since no one is probably making any more (real) Gold any time soon, when the demand goes up, the prices usually follow. These above listed factors may be while Gold in 2023 was so successful.

Was Gold ever priced this high before?

Adjusted for Inflation, the price of Gold was technically higher in the early 1980s than it is now. It is estimated after Inflation is taken into account at today’s price levels, the price of Gold back then would be sitting at about $2,800 per troy ounce. Ok, great, but we haven’t seen the level of inflation that we have been experiencing recently since the early 1980s. So, is Gold going to get to $3,000 per ounce any time soon? What we have in common now that we have with the early 1980s besides inflation is that there are major conflicts going on in the world right now that do not look like they are going to come to an end anytime soon. In the early 1980s, the US was still dealing with the Iran Hostage Crisis and the Soviet Invasion of Afghanistan. These issues bring uncertainty to investors, and that usually translates into investors taking their money out of stocks and bonds and placing it into precious metals like Gold and Silver.

What is 2024 going to look like for Gold prices?

Will the price of Gold in 2024 be similar or better than Gold in 2023? That depends on a few economic factors that are on the horizon. In the United States, there will be a Presidential Election. I’m not going to go deep into politics in this article. But will the party in power try to retain control by making a big push to help ease the pain of buying a new home? The Federal Reserve Bank spokespeople have said they may cut the interest rates three times this year, with the first cut maybe brining a reduction of three-quarters of a point. The President of the United States does not control the Federal Reserve Bank, and neither does Congress. But the President does help get the Chairperson of the Fed nominated. So can the US Government use their influence to help the Fed ease the overall higher costs that ordinary citizens are feeling. Will this help boost the US Housing market again, and get it back to 2021/2022 levels? Even if that happens, and the stock market does great, will that get investors to stop purchasing Gold in 2024? Or will there be more uncertainty as we get closer to the Election of 2024? What will happen to each of the candidates as we start to go through the primaries? In the 1980s, things started to calm down around 1982 and after that. There was a small recession in 1983, but it was followed shortly after that by a period of economic growth that seemed to do well until about 1992. During that time, the price of Gold came back down. But since the Great Recession of 2008 until today, the price has stayed above $1000 per ounce.

Again, Gold is Gold and Stocks/Bonds can go down at any time.

In March of 2020, not that long ago, the stock market did so bad in one day that the regulators had to use the “circuit breaker”. This ensured it could not have the worst day on record, but it got so bad that it was better to stop trading and comeback another day when we could see what the closure of the world was going to do. Gold prices took a hit that day too but shot right back up to almost record levels quickly. And Cryptocurrency did well too because a lot of Americans used their stimulus money to pay for it at around $5000 per Bitcoin. If they sold when Bitcoin hit almost $70,000 in 2021, then good for them! I mean it. But I personally know someone that lost over $100,000 in Cryptocurrency. As of today, the price of one Bitcoin has not exceeded $50,000 since 2021.

Conclusion

We cannot predict the future, but we can look at historical data to try to figure out patterns. Past performance should not be used as a way for you to predict future results. Always make the investments that you think, and feel will be the best for you. I am not an attorney or financial advisor, so you can speak with your legal, financial and/or tax advisor if you need advice.

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