July 20, 2023



Rating agency S&P Global has made amendments to its projected metal and commodity prices for the remainder of the year 2023. Among all metals price predictions, gold appears to be benefiting the most from these new estimates.

Amid the mounting pressure of unrelenting inflation, and subsequent steep increases in interest rates, economic stability is at risk, and so is the demand for commodities. However, S&P remains optimistic, predicting predominantly "broadly supportive" market conditions for most of the metals and mining corporations it rates.

The Impact on Metals and Mining Companies

“Metal prices [have] receded from their historic highs between late 2021 and mid-2022, but for the most part, this has not affected metals and mining companies’ credit profiles,” Simon Redmond, an analyst at S&P Global Ratings has said.

Businesses have, for the most part, trimmed down their debt as it has grown costlier and market conditions have deteriorated. The repercussions of these fluctuating prices on the broader industry appear to be minimal.

Specific Price Assumptions: Winners and Losers

In its recent Metal Price Assumption report, S&P has downgraded price projections for aluminium, thermal coal, and zinc, while uplifting them for gold. For base metals, the ratings agency continues to foresee "supportive fundamentals".

The spot price for gold, exceeding US$1,900 per ounce in the recent weeks, has been ascending at a faster pace "than we previously assumed," states Redmond.

Gold Price Projection: Further Resilience

The revised upward assumption for gold prices through to 2025 is a reflection of enduring high costs globally, intertwined with continuing geopolitical and financial market risks, according to Redmond.

As a consequence, S&P projects that the average price per ounce of gold will be US$1,800 for the remaining half of 2023, marking an increase from the prior assumption of US$1,700, even though prices have sustained above $1,900 for some time now.

Despite this amendment, the new prediction of US$1,800 per ounce might still be conservative, considering that gold price has comfortably been trading in the $1,900's during the first half of 2023 (within the range of approximately US$1820 to US$2040 per ounce).

Underestimation of Gold's Strength: A Retrospective Look

It is worth noting that S&P Global has a recent past marked by under-projecting the enduring strength of gold. In 2021, S&P had forecasted that gold prices would average at $US1,600 per ounce in 2022 and then drop to just $US1,400 per ounce in 2023. However, in a revision of this stance in August of the same year, the price prediction for 2023 was uplifted to US$1,600 per ounce. This estimation, in retrospect, was still quite far off the mark.

As gold continues to demonstrate its resilience, it remains a metal to watch in the second half of 2023. Regardless of the new projection, if the recent performance is any indication, gold may yet surprise the market and possibly even the analysts at S&P Global.

Why It Matters

The shifts in gold prices and their associated predictions have far-reaching implications not just for traders but also for the broader economy. As gold is a globally recognized asset and serves as a safe-haven investment during turbulent times, fluctuations in its price can signal shifts in market sentiment and economic health. High gold prices often reflect investors' concerns about the economy or the stability of other forms of investment. Tracking gold price projections can often offer valuable insights into anticipated future economic conditions.

Long-Term Gold Price Dynamics and Trends

The dynamics of gold prices over the long-term are influenced by multiple factors, ranging from macroeconomic indicators, geopolitical events, to market supply and demand dynamics. In times of economic uncertainty or instability, gold often acts as a 'flight to safety' asset, leading to price surges. Conversely, when economies are booming, and investor confidence is high, gold prices may stagnate or even decline as funds are redirected towards riskier, higher-yield investments.

Trends over the past few years show an overall rising trajectory for gold prices. This is largely due to ongoing global uncertainties, including but not limited to, geopolitical tensions, fluctuations in the US dollar, and major events like the COVID-19 pandemic. Coupled with constraints on gold production due to environmental concerns and logistical challenges, these factors have culminated in a robust bullish trend for gold prices in the medium to long term.

Digital gold and gold-backed digital assets have introduced a new dimension to gold's demand dynamics. As more people gain access to gold investment through digital platforms, the demand for this precious metal may further fuel its long-term price growth.

The Benefits of Buying Gold

Hedge Against Inflation

Gold is often seen as an effective hedge against inflation. When the value of fiat currency declines due to rising inflation, the price of gold typically rises.

Safe Haven Asset

In times of economic or political turmoil, investors tend to turn to gold as a 'safe haven' asset. Its price is often inversely related to the performance of riskier assets like stocks and bonds.


Adding gold to an investment portfolio can provide diversification, reducing risk as gold often moves in opposite directions to stock markets.


Gold can be easily bought and sold almost anywhere in the world, providing high liquidity.

Preservation of Wealth

Gold has maintained its value over long periods of time, making it an attractive option for wealth preservation.

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