Metals Market Report Archive

The Mike Fuljenz Metals Market Report

January 2023 - Week 3 Edition

Gold Continues Strong Run to Kick Off 2023

Gold is up 5% so far this year on the futures market and +4.6% on the spot market, beating stocks by a long shot – continuing a three-month bull-market surge coinciding with the peak in the U.S. Dollar Index (DXY) last October.  In that span of time, gold is up 15.8%, platinum is up +14.7% and silver is up +27.9%, while the Dow is up 12.3%, the S&P 500 is up just 8.5% and the once red-hot NASDAQ is up under 4%.

Gold started 2023 with a bang, gaining $20 on the first trading day of the year and then another +$13 on Day 2, It was “off to the races,” up nearly $100 at one point before consolidating its gains at nearly +$80 so far.

Precious Metals vs. Stocks and the U.S. Dollar in the Last Three Months

The U.S. Dollar Index (DXY) peaked at 114.1 on September 26, 2022. As of November 3, it was still at a lofty 113, but it has since fallen 10%, to 102.3.  Taking a three-month snapshot of gold vs. stocks from October 17, 2022, to January 17, 2023, we find the impact of a weakening dollar super-charging gold vs. stocks. The first nine months of 2022 found stocks beating gold, then gold trounced stocks by year’s end.

This 3-month turnaround mostly has to do with the fate of the U.S. Dollar, which in turn has to do with the mismanagement of monetary policy by the U.S. Federal Reserve and overspending by the Biden Administration and Congress – sending America far deeper into debt as interest rates soar 10-fold. Now, America faces $32 trillion in debt at an average 5% interest ($1.6 trillion per year in debt service), instead of about $20 trillion at an average 1% rate ($200 billion in debt service) in the final President Donald J. Trump fiscal year.

Predictions for Higher Metals Prices Continue

We have been reporting several instances of predictions of higher prices for gold – some in the $3.000 to $4,000 range. We haven’t seen such predictions in several years. Another one emerged last week, but this forecast was more modest (like ours), and we frankly can’t see how gold can reach $4,000 in 12 months. My prediction is that gold at some point in 2023 breaks $2,400 an ounce. That is why it is important for you to contact your professional sales representative to find out how we can help you better prepare your portfolio for uncertainty with high quality precious metal products and expert selected certified rare coins.

Eric Strand, manager of the AuAg ESG Gold Mining ETF, said last month that 2023 would deliver a new all-time high for gold and the start of a “new secular bull market,” with the price exceeding $2,100 per ounce. “Central banks as a group have continued, since the great financial crisis, to add more and more gold to their reserves, with a new record set for Q3 2022,” Strand said.

“It is our opinion that central banks will pivot on their rate hikes and become dovish during 2023, which will ignite an explosive move for gold for years to come. We, therefore, believe gold will end 2023 at least 20% higher. 

We previously reported on the $3,000 to $4,000 prediction by Juerg Kiener, managing director and chief investment officer at Swiss Asia Capital. He told CNBC in December that current conditions are like those that propelled gold to a huge 7-fold bull market surge from 2001 to 2011. “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, on CNBC’s program Street Signs Asia. “It is not going to be just 10 or 20%, I think I’m looking at a move which will really make new highs.”


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