‘Keep buying gold and silver in 2023’, recommends Degussa

Global Nuggets

23/01/2023  

‘Keep buying gold and silver in 2023’, recommends Degussa, Germany’s largest precious metals business

In the week that Jacinda Ardern threw in the towel, it’s easy to get distracted by what’s happening in New Zealand and not focus beyond. Especially with a falling housing market and a Kiwi recession forecast for much of 2023.

Why buy gold and silver now?

As is always the case, the answer lies in looking much wider – and its not just the US. There are some major changes afoot right now in the world and these are driving the price of gold and silver upwards. Last Friday gold went through the NZ$3,000 barrier for the second time this year. To put this in perspective, the NZ$3,000 barrier has been breached only 5 times, all of which are since 2020. In the past week, Degussa, the largest, oldest, and most respected German precious metals business forecast gold to reach over NZ$3,400 in 2023 (US$2,200) and silver to NZ$48 (US$30).

These are the strongest indications for both gold and silver that we have seen for a long time and a great time to get into both metals.

What’s driving this optimism in precious metals prices?

De-Dollarization – a new world order may emerge

Since WWII the US Dollar has been the world’s safe-haven currency, but this is changing. The US Dollar has dropped against other major currencies by over 10%  since September and not by coincidence. Sanctions were imposed on Russia following the Ukraine invasion in 2022, and since then Russia and China have been buying up gold in record volumes, developing their own reserve currency, backed by gold, as an alternative to the USD. This initiative is gaining momentum.

A weakening US$ strengthens the safe haven attributes of gold.

Recession in 2023

In almost all of the developed world, economists are forecasting recession in 2023. Whether the US, UK, Germany or NZ, the story is the same. The likelihood is that the US FED will be forced to reverse the brakes to help stoke the economy, most likely through Quantitative Easing, and this is likely to be mirrored in other economies. Expect to see similar measures in NZ in 2023, especially with elections on the horizon.

Gold historically performs well in times of recession

‘Have fun staying poor’ slogan rings hollow Never has there been a better time than to reflect on the mocking crypto slogan ‘have fun staying poor’, relating to those stupid enough not to invest in cryptocurrencies. The arrogance of the slogan rings hollow after the collapse of FTX in 2002. Only last week Genesis collapsed, as the contagion across the sector spreads. Where things will go in 2023 is anyone’s guess. Millions of crypto investors have lost funds. Both gold and silver are real and tangible. Enough said.

Here are some nuggets from around the world:

Keep buying gold and silver in 2023 - Degussa

https://www.kitco.com/commentaries/2022-11-09/Silver-joining-copper-in-upcoming-supply-crunch.html

Gold to go to US$2200 and silver to US$30 in 2023

https://www.kitco.com/commentaries/2022-11-04/Gold-began-November-like-a-lamb-but-may-end-like-a-lion.html

New Zealand forecasts recession in 2023

https://www.cnbc.com/2022/11/03/bank-of-england-uk-faces-longest-ever-recession.html

New Russian – Chinese gold backed reserve currency

https://www.cnbc.com/2022/12/18/how-sam-bankman-fried-ran-8-billion-fraud-government-prosecutors.html

FTX Collapse Claims Big Victim: Genesis Goes Bankrupt

https://www.fxstreet.com/news/us-dollar-to-peak-and-then-weaken-in-2023-citi-202212290911

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