Historic Panic In 2022 And How It Will Impact Trading In 2023 As Investors Move Into Gold & Silver

There is no question that 2022 was a historic year of panic. Here is a look at how it will impact trading in 2023 as investors move into gold and silver.

Investors Moving Into Gold & Silver
January 4 (King World News) – Ole Hansen, Head of Commodity Strategy at SaxoBank:  As one of their first trading decisions in 2023 we have seen investors, perhaps a bit prematurely, rush into gold and silver. This in anticipation of a much more investor friendly year for precious metals.

In addition to the mentioned supportive drivers for gold this year, we see continued strong demand from central banks providing a soft floor in the market. During the first three quarters of last year the World Gold Council reported official sector purchases of 673 tons, higher than any full year since 1967. Part of that demand being driven by a handful of central banks wanting to reduce their dollar exposure. This de-dollarization and general appetite for gold should ensure another strong year of official sector gold buying…

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ALERT:
Billionaire mining legend Pierre Lassonde has been buying large blocks of shares in this gold exploration company and believes the stock is set to soar more than 150% in the next 6 months. To find out which company CLICK HERE OR ON THE IMAGE BELOW.Sponsored

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Adding to this we expect the friendlier investment environment for gold to reverse last year’s 120 tons reduction via ETF’s to a potential increase of at least 200 tons. Hedge funds meanwhile turned net buyers from early November when a triple bottom signaled a change away from the then prevailing strategy of selling gold on any signs of strength. As a result, the net position during this time flipped from a 38k contract net short to a 67k contract net long on December 27.

Traders’ conviction at the beginning of a new trading year always tends to be low for fear of catching the wrong move. At the same time, however, the fear of missing out (FOMA) can also drive a rapid buildup in positioning which subsequently can be left exposed should a change in direction occur. In the short term these mechanics will have an impact on the price action in gold, silver and platinum, not least considering their strong move higher during the first few hours of trading.

From a technical perspective the acceleration today above an already steep uptrend at $1852 has raised the risk of the market having rallied too fast too soon, and potential buyers should consider holding back waiting for a correction or consolidation phase. The next key level of resistance being the June high at $1878 followed by $1897, the latter representing the 61.8% retracement of the 2022 correction. A reversal, meanwhile, to the 21-day moving average, currently at $1802, cannot be ruled out and would signal any change in the overall positive sentiment.

Summary
Gold together with silver and platinum are among a few commodities trading up as a new year gets under way. Gold’s newfound resilience and momentum from December has been carried over to January as investors seek shelter from what has been forecast to be another overall challenging year ahead for other asset classes, especially stocks.

The Year Of Panic…

Historic Panic
Jason Geopfert at SentimenTrader:  The worst year ever triggers a historic amount of panic.

Key points:

• The S&P 500 showed a negative average return following big up days and big down days in 2022
• Never before have both strategies led to such negative returns
• Stocks have tended to rebound following similar years, as well as after extremes in model Panic

The worst year ever for chasing rallies and buying dips
The worst year ever for investors ended like it spent most of the year – swinging wildly from one extreme to the other. Last week added to the large tally of days when the most benchmarked index in the world gained at least 1% in a single session.…….more here

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