Gold stabilizes above the $2000 level recording its best year ‎since 2020‎

Gold prices stabilized, Friday, December 29, recording their best year since 2020 at levels exceeding $2,000 per ounce, supported by expectations of an interest rate cut by the US Federal Reserve next March.

The price of crude oil reached $2,062.59 per ounce, unchanged from the previous session. US gold futures settled 0.6% lower at $2,071.80, ending the year up 13.45%, achieving the first positive year in three years.

The year 2023 witnessed prices fluctuating between low levels near $1,800 and a record level at $2,135.40.

“The ship is moving toward calmer waters, so to speak, an environment with lower interest rates, which means a lower dollar, and therefore gold should perform better,” Marx analyst Edward Meier said.

UBS analyst Giovanni Stonovo said: “To see higher levels, we need to see stronger demand from investors, such as increased ETF flows. For this, weaker US economic data and lower inflation appear The Federal Reserve is more pessimistic.”

Low interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar.

The dollar index is on track to decline by 2% in 2023, while benchmark 10-year Treasury yields lie near their lowest levels since July.

“The rest of the precious metals group has not shared in gold’s good fortune and gold prices are very high, given the nominal level of interest rates,” New York-based independent metals trader Tai Wong said.