BUY GOLD NOW! Bank Calls For $3000 Gold in 2023!

Gold prices have fallen below $1,800 per ounce after Federal Reserve Chair Jerome Powell signalled that the US central bank will maintain aggressively high interest rates until 2023.

However, one market strategist believes that rising interest rates will be less of a headwind for gold because a hawkish Federal Reserve will benefit the US dollar less.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, told Kitco News that growing recession fears are beginning to outweigh the Federal Reserve’s aggressive monetary policy stance.

The remarks come just one day after the Federal Reserve signalled that it is far from done raising interest rates.

According to the Federal Reserve’s most recent economic projections, interest rates will peak at 5.1% in 2023.

Powell stated during his press conference that the central bank does not intend to lower interest rates at any point next year.

“Powell stated unequivocally that interest rates will rise in 2023.

We are still experiencing dangerously high inflation “Milling-Stanley stated.

However, Milling-Stanley warned that the Fed’s projections and stance could change quickly as the world enters a deeper recession.

According to Milling-Stanley, the Federal Reserve will continue to raise interest rates in the first half of the year, but will be forced to cut rates by the end of the year or early in 2024.

“I believe gold will be in a wait-and-see mode for the first half of the year, which will moderate demand.

I see opportunities where it rises above $1,800 per ounce “He stated.

“The world is watching for signs of what kind of recession we will experience.

They will, unfortunately, have to wait a little longer.”

The Federal Reserve ended 2022 with a 50 basis point hike on Wednesday, raising interest rates to 4.5% and marking the most aggressive rate hike pace in more than 40 years.

Milling-Stanley pointed out that the full impact of the rate hikes has yet to be felt by the US economy.

“I don’t see how the US economy can avoid slower growth in 2023, which will have an impact on US monetary policy,” he said.

“If we do have a recession, gold will skyrocket.”

According to Milling-Stanley, gold prices have returned an average of 20% during the last seven global recessions.

In addition to slowing economic activity, Milling-Stanley stated that inflation remains a major threat.

The US Labor Department reported earlier this week that the Consumer Price Index rose 7.1%, more than expected.

However, Milling-Stanley pointed out that inflation remains well above the central bank’s 2% target.

“The inflation threat is not yet over.

I don’t believe wages or service costs have peaked “He stated.

“A 7% inflation reading six months ago would have been terrifying.”

While Milling-Stanley anticipates relatively stable gold prices through the first half of the year, State Street expects gold to trade in a fairly wide range between $1,600 and $1,900 per ounce in the new year.

In the base case, State Street sees a 20% chance of gold prices falling to $1,500 per ounce if the Federal Reserve can control inflation and avoid a recession.

Simultaneously, it sees a 20% chance of gold prices returning to $2,000 per ounce.

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