How high will precious metal prices go in 2023? [Video]

 It’s official:  Gold is everyone’s favourite trade once again and that's set to continue throughout 2023 on growing risk of further banking turmoil, a looming credit crunch and rising hopes of a Fed pivot. 

After two weeks of banking turmoil, the Federal Reserve on Wednesday continued to raise its benchmark interest rate for the ninth time in just over a year.

The Fed has now jacked up interest rates in the world’s largest economy at the fast pace in history – from virtually zero to a current range of 4.75% to 5% – the highest rate since 2007. Put another way, that’s a whopping grand slam total of 475 basis points of hikes since March 2022.

The fed also signalled that it might be nearing the end of its rate-hike cycle. In part, that is because a decline in bank lending could help the central bank unintentionally achieve its overarching goal of slowing the economy and taming inflation.

At the press conference that followed the rate decision, Fed Chairman Jerome Powell said banking industry stress could trigger a “credit crunch” with significant implications, resulting in stricter lending thus making it extremely harder for individuals and businesses to qualify for loans, mortgages and credit. Powell concluded by saying “tighter lending conditions will have the same slowing effect on inflation that a Fed hike can”.

Historically, the Federal Reserve has never been right on monetary policy and has a proven track record of setting the economy up for an even bigger crisis ahead.

And that's exactly what we're seeing play out again, right now!

Traders have been piling into precious metals at astonishing pace this month following the collapse of Silicon Valley Bank and Signature Bank as well as the disorderly implosion of Credit Suisse – with many market participants convinced that this could just be the tip of the iceberg.

Last week, the precious metal markets recorded a net inflow totalling $5.9 billion. That's the second largest inflow into safe-haven metals ever recorded in a single week since the 2008 Global Financial Crisis.

Evidence shows the global banking crisis was sparked as direct consequence of soaring interest rates and liquidity risks. But this crisis could be about to get even bigger as it quickly morphs into a “credit crisis” too.

This week, Gold prices have breached $2,000 an ounce twice, in a matter of days – notching up impressive gain of over 10%, since the collapse of Silicon Valley Bank earlier this month.

Interestingly, that’s the exact level Gold prices were trading at three years ago – back in March 2020 – just before prices blasted through all-time record highs.

Once again, the stars appear to be aligning for Gold, which suggests that new record highs could be on the horizon. That’s welcoming news for the bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: