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Below are Views on Gold and Silver By Mr. Anuj Gupta, Vice President, IIFL Securities

Gold may test 58000 to 60,000 ($2000 to $2200 and Silver May test 75000 to 80,000 ($28 to $30) on MCX in the Year 2023."

In the calendar year 2022 we saw a recovery in Gold and silver in the fourth quarter.  Recovery comes from the demand from the central bank and also expectation of less hawkish instances in next year.  For the next year we are expecting that gold and silver may rise again in domestic and well and in international terms. 

on Mcx gold increased by 13.64% and is currently trading at 54660 levels while in the international market it corrected by 1.74% and trading at $1797 per ounce.  Silver after negative closed in the year 2021, in the year 2022 silver recovered and traded higher by 10.20% at 69050 levels. We have observed in the year 2022 that the demand for precious metals always shines in any situation, it might be inflation, geopolitical tension, higher crude oil prices and higher interest rates. 

For the next year we are expecting that gold and silver may trade towards northwards and may test new high levels. The main important thing is that  the peak out of interest rates give support to the yellow metals. In its last monetary policy meeting for 2022, the Federal Reserve forecasted the Fed Funds rate peaking above 5% in 2023. The central bank's updated forecast capped a year that saw the most aggressive tightening cycle since 1981 as inflation rose to a more than 40-year high. While the Federal Reserve continues to take a firm stance on inflation, economists note that the central bank is closer to the end of its tightening cycle, which could be good for gold. Bank of America looks for the Federal Reserve to end its tightening cycle in March and sees the first rate cut by the end of 2023 and it is also expecting that the Federal bank may start cutting interest rates by the end of the year 2023.

The Federal Reserve sees core inflation rising 3.5% in 2023, which is relatively in line with consensus estimates ranging between 3% and 4%. This would also help the central bank not to increase interest rates but also give indication of starting to cut interest rates.

For silver, the global silver demand is expected to hit a new record of 1.21 billion ounces this year, rising 16% from 2021. As silver is precious cum industrial metal, the demand from the physical side plays an important role for the silver price trend.  Physical investment demand increased by 18% as compared to last year and expected to rise 329 million ounces. Although the demand from retail investors' side has also been significant in the year 2022.  Demand for jewellery, silver increased by 29% (235 million ounce) and 72% (73 million ounce) respectively. Demand for coins is also at record levels almost 100%. Industrial demand for silver was at a record in 2022, reaching 539 million ounces. The automotive sector also contributed to additional demand, particularly the electrification of vehicles. And India is responsible for at least half of each category. 

Overcome from the covid of the Chinese economy will be positive for the industrial metals.  Looking and considering the factors are positive for the yellow metals.

Technically the trend of gold and silver are positive. Both metals are following higher top higher bottom formations coupled with bullish candlestick patterns. Prices are trading at 10 and 20 years EMA (exponential moving average). MACD and RSI both are indicating positive momentum. Based on the chart structures and indicators indication we are expecting that gold and silver may rise in the year 2023. Gold may test 58000 to 60,000 ($2000 TO $2200) levels and silver may test 78000 to 80000 ($28 to $30) levels.

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