The year-over-year gold and silver prices remained relatively stable despite the uncertain macroeconomic situation, according to data released on December 26, 2022. Gold is currently at $1,797 an ounce as opposed to last year’s $1,810. Meanwhile, silver is now traded at $23.04 an ounce, only slightly higher than last year’s $23.72.
Gold reached its all-time high value on March 8, 2022, when an ounce of the precious metal was sold for $2,070. Meanwhile, silver rose to trade close to $27 per unit, below its all-time high rate of $40 an ounce in 2011.
This year, the two commodities performed better than the two largest crypto tokens, Bitcoin and Ether. Analysis showed that Bitcoin was down 66 percent compared to last year, while Ether had lost more than 70 percent of its value within the same period.
Advocates of gold and silver said both commodities would see bullish trends in 2023. However, Kitco News contributor Phillip Streible explained that the decline in inflation and improved yield curve for government bonds would affect their prices.
“By year-end [2023], inflation should decline to 3-3.5 percent, leading to gold prices averaging $1,950/oz with extensions up over $2,000 at different periods,” Streible said. “We should see the 2’s vs. 10’s yield curve flatten while Silver could easily see ‘green shoots’ up into the mid-high $ ’30s, settling back to $28 by year-end.”
Peter can’t miss.
— THE MAYOR OF MATIC (@MayorOfMatic) December 25, 2022
The bottom is in. pic.twitter.com/vRuiZVhPuJ
SchiffGold founder Peter Schiff, a renowned gold enthusiast, agreed with Streible’s remark about the bullish trends for gold and silver. However, He disagreed about the fast decline of inflation, saying it was unlikely that the rate would get close to the two percent target soon. Schiff added that while inflation could drop, he believed it would spike over 10 percent within 2023.
The macroeconomic instability due to a combination of the COVID-19 pandemic, the Ukraine War and increased global money supply have caused fluctuations in gold and silver prices since January. The Federal Reserve has also increased its benchmark interest rates at every FOMC meeting since March to bring down inflation.
Last week, for example, gold and silver prices went down following upbeat U.S. economic data. The data showed fewer unemployment claims and higher Q3 gross domestic product than expected, indicating that the Fed still needs to take more action as the economy has not slowed down enough. As a result, investors and economists have expressed wariness that the Fed may increase the interest rates too high to the point of a recession.
High benchmark interest rates affect businesses due to increased borrowing costs. The housing market is also significantly affected by the high rates, as house prices skyrocket across the U.S. and cause fewer people to be able to afford homes.
Bitcoin in 2022
After hitting its all-time high value of $69,000 per unit in November 2021, a number of crypto analysts predicted that Bitcoin would strengthen in 2022. These analysts, however, did not foresee the downfall of many high-profile crypto companies and projects — including Terra-Luna and FTX.
My #Christmas gift to Peter Schiff is this #gold chart which compares its performance to #Bitcoin during the highest period of inflation in a generation. https://t.co/sMqEGowK4b pic.twitter.com/QscVKDcruM
— @misconfig_exe $LTC $LTCBTC $LTCETH Ⓜ️🕸 🗸 (@misconfig_exe) December 25, 2022
Silicon Valley investor Tim Draper, who last year predicted that Bitcoin might hit $250,000 this year, said he still stood by his words.
“I expect a flight to quality and decentralized crypto like Bitcoin, and for some of the weaker coins to become relics,” Draper said.
Nexo CEO Antoni Trenchev had earlier predicted that Bitcoin’s price would reach $100,000 in 2022. Trenchev recently said that outside factors had interfered with Bitcoin’s growth, which was “on a very positive path” due to higher institutional adoption.
The CEO said he did not want to share his projection about Bitcoin prices anymore but still advised people to get ahold of the token.
“Get a single-digit percentage point of your investable assets in bitcoin and do not look at it for 5-10 years,” Trenchev said. “Thank me later.”