With just three months of the year left to run, we are finally seeing an incredible opportunity to buy gold– but it’s playing out right now, so you’ll need to act quickly if you want to take advantage of 2023’s best and biggest window to date.
Unprecedented so far this year, this chance to acquire gold at a highly favourable price comes as a result of a new twist in the rate hikes tale. While the Federal Reserve has seesawed throughout the last 18 months or so, the pendulum now appears to have swung back to the side of entirely stamping out inflation.
Comments made by Jerome Powell appear to confirm this, with the Federal Reserve Chair stating that bringing inflation down to negligible levels remained the overall priority. “The worst thing we can do is to fail to restore price stability because the record is clear on that. If you don’t restore price stability, inflation comes back.
Speaking after last week’s monthly FOMC meeting, he added, “It can be a miserable period to have inflation constantly coming back and the Fed coming in and having to tighten again and again. So, the best thing we can do for everyone, we believe, is to restore price stability.”
In practise, what those words mean is that additional rate hikes remain very much on the table, with one or more further increases likely in the remaining months of the year.
In the short term, this insistence on staying the course until the 2% inflation target is reached has created a tremendous opportunity to buy gold. The economy is still performing well, 10-year bond yields are at a 16-year high and the U.S. dollar index has regained some strength after a topsy-turvy year – all factors which have served to coral the gold bulls. Prices today are at their most attractive rate for investors in over nine months, with gold trading around £1,521 ($1,865).
This represents the single most compelling reason to buy of 2023 to date and is a perfect example of why it pays to buy the dip. With gold trading well over £1,550 ($1,900) for much of the last few months, there hasn’t been as enticing a window as this since 2022.
However, as is always the case, you’ll need to move quickly because under the surface, many moving parts are aligning to push gold higher.
Saxo Bank’s head of commodity strategy Ole Hansen says now is exactly the moment to be bullish on gold. While the Federal Reserve has once again turned towards restrictive policy rhetoric in public, it privately is in a tricky spot Hansen argues, with inflation remaining stubbornly high and an economic slowdown incoming.
“In my book is incoming stagflation and that’s been holding gold up at these levels. We have said before, but now is the time to be patiently bullish on gold,” he affirms. “Saxo Bank’s fixed income specialist has said ‘higher for longer actually means, higher until something breaks.’ I think that is what we will see and that supports gold prices.”
With the Federal Reserve’s policy making a soft landing ever more unlikely, safe-haven demand for gold could be about to rocket. This will serve to push prices off current levels – meaning if you don’t act now, you could miss out on this incredible window of opportunity.
“Demand for gold as a hedge against a soft-landing failure is unlikely to go away as the outlook for the US economic outlook in the months ahead looks increasingly challenged. With that in mind, we maintain a patiently bullish view on gold,” he said.
Another factor to consider is that a government shut down is expected as early as this weekend. With a failure to agree funding in Congress, the US government will become insolvent on 01 October. It has been reported that Golman Sachs projects a three-week shutdown while policy makers battle to push through a funding bill. This creates a risk-off environment which could see safe-haven demand for gold ignite in an instant. If that happens, prices are all but certain to soar back above the £1,550 ($1,900) marker we have come to expect from the yellow metal.
Don’t miss this chance to acquire gold at today’s highly favourable rate. Buy now before prices increase.
