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Research firm BMI said it maintains its 2023 gold price forecast at $1,950 per ounce (oz) despite current weakness.
Gold prices are likely to be capped in the next few weeks by renewed US dollar strength and rising bond yields on a slight increase in inflation and the market expectations of another hike in key policy rate by the US Federal Reserve, the Fitch Solutions company said in a report on Tuesday.
"However, we believe this is likely to pass as Q4-23 progresses and the US falls into a shallow recession in H1-24, boosting demand for gold as the safe haven asset."
Gold, meanwhile, posted its biggest one-day loss since August 1 on Tuesday. Spot gold was at $1924.41 early on Wednesday, while US gold futures edged lower to $1,949.80, according to Refinitiv.
On the supply side, BMI sees global gold production to increase from 117.7 million ounces (moz) in 2023 to 135.1 moz by 2032. "This would be an acceleration from the average growth of just 0.8% over the 2016-2020 period."
For 2023 too the consultancy sees higher output from the mines to 117.7 moz from 115.1 moz in 2022 supported by the higher prices and due to the waning of the pandemic-related disruptions.
(Writing by Brinda Darasha; editing by Seban Scaria)
