Nicholas Frappell

I expect inflationary pressures to remain through 2023, as the US economy remains quite robust, and Chinese reopening brings both boosts to demand and periods of supply-chain disruption, leading to a continuation of tight monetary policy. The one major contributor to lax monetary policy last year, Japan, is now part of the tightening story as the Bank of Japan widens yield bands and may even exit ‘Yield Curve Control’ in the face of rising CPI.

I see these factors as headwinds for gold during H1 2023.

However, given high geopolitical uncertainty and the potential for volatility as the world continues to pass through a key inflection point after years of easy money and subdued price pressures, I have relied on technical targets that display the potential for a significant range.

Top three drivers for the gold price in 2023: The US dollar / real rates, Japanese monetary policy, progress in the Ukraine war.

Silver should benefit from an ongoing supply deficit and continued demand from both physical investors and the industrial sector. Electric vehicles and growth in solar are long-term shifts that should benefit silver through the coming year. If ‘Dr. Copper’ takes a positive view of the global economy this year, then I expect silver to benefit. Demand from Indian restocking may not be as notable in 2023 as it was last year, however. Silver always has scope for some wild, if short-lived, market moves, of course.