Gold mid-year outlook 2023

Jul 11, 2023

Perth Mint Gold

According to the World Gold Council, developed market central banks are nearing the end of their tightening cycles.

For the moment, market consensus points to a mild contraction in the US in late 2023 and slow growth in developed markets. But, given the historical lag between monetary policy and economic performance, investors are wary that a hard landing may be still to come.

In the first six months of 2023, gold increased by 5.4% in USD. This closed the first half of the year at USD 1,912.25 per ounce, meaning gold outperformed all other major assets, apart from developed market stocks.

Tightening to end?

In the mid-year outlook report from the World Gold Council, it was stated that both the European Central Bank (ECB) and the Bank of England (BoE) increased interest rates in June, but the US Fed kept its target rate unchanged as it lets the effects of the tightening cycle make their way through the real economy. And while bond markets expect the ECB and the BoE to further increase target rates, markets anticipate the end of the cycle is near – or at least it will be by the end of the year.

How could gold perform?

The report went on to say that should the predicted mild US contraction happen, the strong first half for gold could give way to a more neutral H2.   

In this situation, gold would draw support from a weaker US dollar and stable bond yields, although this would be met by downward pressure from cooling inflation. If history is a guide, the report notes that monetary policy hold cycles tend to spell a higher-than-average monthly return for gold.

To read the full report from the World Gold Council, visit: