Daily Gold Market Report

Gold subdued despite breakdown in debt ceiling talks, Powell’s hint at rate pause
UBS sees gold at $2100 by year-end, $2200 by March 2024 

(USAGOLD – 3/22/2023) – Gold remained surprisingly subdued in early trading despite a breakdown in negotiations on the debt ceiling and Fed chair Powell’s hint that a rate pause was forthcoming. It is down $2 at $1978. Silver is down 3¢ at $23.90.

In a recent client update, Swiss-based UBS points out that, despite gold’s choppy trading of late, it is still 8.2% higher on the year and predicts “it’s likely to break its all-time high later this year with multiple mid-to-longer-term drivers.” Those drivers include “robust” central bank demand, “broad” US dollar weakness, and recession-related safe-haven flows. It sees gold hitting $2100 by year-end and $2200 by March 2024. “The direction of a weakening dollar is clear,” it states, “with the US Fed having signaled a pause in its current tightening cycle after 500 basis points of rate hikes over the past 14 months. Other major central banks, meanwhile, remain on track to do more to fight inflation.”