Ultimate magazine theme for WordPress.

Gold marks an annual decline as central banks try to wean the economy off the stimulus

  • Silver worst year since 2014
  • So far this year has fallen by around 9.4%, palladium 22.2%
  • Gold faces a “relegation battle” in view of the rate hikes in 2022 – analyst

December 31 (Reuters) – The price of gold marked its biggest annual decline since 2015, curbed by a resurgent dollar as investors prepared to usher in a new year in which money supply could be constrained, even under the threat of the Omicron -Coronavirus variant persists.

Spot gold last rose 0.7% to $ 1,827.51 an ounce at 1:46 p.m. ET (1846 GMT) after peaking at $ 1,827.26 on Friday, aided by a Decline in the dollar and global stocks.

US gold futures rose 0.8% to $ 1,828.60.

Register now for FREE unlimited access to Reuters.com

to register

Gold was down about 4% in 2021 as a recovering global economy drove more investors to riskier assets and lowered interest in safe investments like gold bars. Continue reading

Adding to this mix was evidence that central banks would be speeding up their massive pandemic-triggered money printing to stimulate the economy.

Although gold bars are viewed as a hedge against inflation usually resulting from widespread stimulus, rate hikes would result in higher opportunity costs for holding gold that bears no interest, and lifting US Treasuries and the dollar.

“With 10-year US yields slated to hit 2% in 2022, along with temporary inflation and, of course, higher interest rates, there could be a relegation battle for gold,” said DailyFX analyst Warren Venketas.

Gold is declining every year

The Fed was expected to make three rate hikes in 2022. read more

While concerns about the effectiveness of the Omicron variant could help gold, higher yields could hurt its  -peal, said Han Tan, senior market analyst at Exinity.

At the same time, “gold could see multiple catalysts for significant gains over the next year, whether it be a monetary policy error by the Fed, persistently high inflation, or even an increase in geopolitical tensions.”

Spot silver rose 1.2% to $ 23.30 an ounce, down over 11% this year, its worst performance in seven years.

Platinum rose 0.4% to $ 965.10, falling more than 9% annually. Palladium was down 3% to $ 1,906.27, the worst annual decline since 2015.

Register now for FREE unlimited access to Reuters.com

to register

Reporting by Kavya Guduru, Bharat Govind Gautam, Asha Sistla and Seher Dareen in Bengaluru Editing by Matthew Lewis and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

Comments are closed.

%d bloggers like this: