Commodities nickel and gold on the rise in 2023

2022 was an extremely volatile year for commodities, especially precious metals, driven by a combination of macroeconomic and geopolitical factors. Starting with Russia’s invasion of Ukraine which sparked a global energy crisis, driving inflation and a response by central banks to hike interest rates; combined with China’s stringent zero-COVID policy spurring on-going lock-downs and dampening its economy, the recent economic and geopolitical activities have captured the market’s attention for nickel and gold prices in particular which are predicted to be on the rise in 2023. Let’s take a closer look at what 2023 has in store for these two metal prices.?

Nickel

The leading global consumer for nickel is China where it is predominantly used in the production of stainless steel but also in electric vehicles. As China started to drop its stringent zero-COVID policy at the end of 2022, demand optimism for the precious metal grew ringing in the new year with a listing price over $US31,000 ($44,514) a tonne - nickel’s strongest position in over a decade. And as electric vehicle sales continue to grow, the battery metal is positioned to benefit from the increase in demand.?

Despite this, the global primary market is currently in surplus thanks to a strong supply by Indonesia, the world’s primary nickel producer, combined with a subdued economic growth for the global economy. As a result of this, the consensus nickel price forecast has been lowered 0.7% for the short-term in 2023 where prices are predicted to hover between $US20,000 a tonne and $US20,500 a tonne over the first half of 2023 before gradually increasing to $US21,000 a tonne in the second half of the year as the global economic outlook is expected to improve.

Gold?

Gold - also known as the safe haven commodity - went from strength to strength in 2022 as the world faced macroeconomic instability combined with geopolitical instability, sparking investment demand. While gold prices reached a six-month high in January of $1,837 per ounce, strong gold prices are expected to prevail for the first half of the year as global economic uncertainty prevails. This is expected to retreat in the second half of the year with a recovery of the global economy.?

While 2022 was an economically disappointing year resulting in wide-spread volatility for commodities, weak global economic growth is predicted to continue into 2023 at least for the first half of the year with an improvement predicted for the second half. While the global economic uncertainty prevails, gold prices are set to remain strong while, as the global economy starts to recover in the second half of 2023, the nickel price is also expected to rise.?