ANZ analysts have labelled the safe-haven asset class a “golden ticket” for investors in 2023 as the outlook for global growth darkens.
Global recession fears signal bumpy times ahead, but not for gold, according to ANZ Research, which boosted its year-end forecast for the precious metal as investors seek safe-haven assets and the US dollar rally fades.
Analysts expect gold to outperform equities over the coming year as peak rates come into view and recession fears are realised, raising their end-of-year target price to US1900 an ounce from $US1700 an ounce. They expect safe haven buying to raise prices as the US enters a recession in 2023, and Europe faces geopolitical risks and energy shortages.
ASX gold miners have suffered through the volatility. The VanEck Gold Miners ETF fell 27 per cent in the six months to September 30 as gold fell to a 2½-year low of $US1622, before gaining 23 per cent alongside a rebound in prices to $US1800. Returns tend to come under pressure in the six months leading up to recessions, averaging about 2 per cent, before rebounding with average returns of 16 per cent as economies experience sustained contraction.Each recession is distinct, but Mr Hynes and Ms Kumari call out “striking similarities” between the 1980s and today. These include the energy crisis stemming from the 1979 Iranian Revolution, which pushed up already high inflation and saw central banks tighten monetary policy.
This is offset by stronger demand from China easing COVID-19 restrictions, with analysts forecasting prices to rise to $US115 a barrel by mid-next year from around $US79 a barrel today.ANZ expects iron ore prices to remain around $US100 a tonne and are watching for an improvement in Chinese property sales to boost steel demand.
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