KUALA LUMPUR (Dec 23): Gold prices could surge to US$4,000 (RM17,718) per ounce in 2023 as interest rate hikes and recession fears keep markets volatile.

In a report on Thursday (Dec 22), CNBC quoted Juerg Kiener, managing director and chief investment officer of Swiss Asia Capital, as saying that the price of the precious metal could reach between US$2,500 and US$4,000 sometime next year.

There was a good chance the gold market saw a major move, he said, adding "it's not going to be just 10% or 20%", but a move that would "really make new highs".

Kiener explained that many economies could face "a little bit of a recession in the first quarter", which would lead to many central banks slowing their pace of interest rate hikes and make gold instantly more attractive". He said gold was also the only asset which every central bank owned.

CNBC said that according to the World Gold Council, central banks bought 400 tonnes of gold in the third quarter, almost double the previous record of 241 tonnes during the same period in 2018.

"Since [the] 2000s, the average return [on] gold in any currency is somewhere between 8% and 10% a year. You haven't achieved that in the bond market. You have not achieved that in the equity market."

Kiener also said investors would look to gold with inflation remaining high in many parts of the world.

"Gold is a very good inflation hedge, a great catch during stagflation and a great add onto a portfolio."

Meanwhile, despite the strong demand for gold, Kenny Polcari, senior market strategist at Slatestone Wealth, disagreed that prices could more than double next year.

"I don't have a US$4,000 price target on it, although I'd love to see it go there," he told CNBC.

Polcari argued that gold prices would see some pullback and resistance at US$1,900 an ounce. Prices would be determined by how inflation responds to interest rate hikes globally, he said.

"I like gold. I've always liked gold," he said. "Gold should be a part of your portfolio. I think it is going to do better, but I don't have a US$4,000 price target on it."