Gold Price Update: Q2 2023 in Review

How did the gold price perform in Q2?

The gold price spent a decent amount of time above US$2,000 in Q2, but has since pulled back.

The yellow metal remained near or above that level through April and May, but in June its price strength began to decline. It finished the second quarter around US$1,920, although by mid-July it was back up around US$1,970.

Actions from the US Federal Reserve continue to impact gold, and at its June meeting it left interest rates unchanged at 5 to 5.25 percent. The decision came after 10 consecutive increases from the central bank.

Fed officials have said the goal is to take time to review the effects of its aggressive hiking strategy.

Since the June meeting, experts have been debating what the Fed will do next. While some market watchers are surprised the Fed has been able to raise rates as far as it has and don't think it will be able to go much further, the latest "dot plot" projections from Fed officials tell another story — they show two more hikes of 25 basis points each are possible in 2023.

In the gold space, there's a broad consensus that a change in tactics from the Fed could provide a price boost.

As part of its half-year update, the World Gold Council said global economies appear to be nearing the end of their tightening cycles. “As monetary policy likely transitions from tightening to on-hold, market consensus is for a mild contraction in the US this year, and slow growth in developed markets,” the organization states in its report.

“In this context and following gold’s positive returns in H1, we expect gold to remain supported on the back of range bound bond yields and a weaker dollar,” the World Gold Council also notes.

According to the association, gold has been one of the only true positive investment assets so far in 2023, especially as the economy was hit with uncertainty in North America from several staggering bank runs.