Gold set for worst year

Gold was set on Friday for its worst year since 2015 as a global economic recovery from last year’s contraction robbed the metal of safe-haven flows and as central banks prepared to raise interest rates to contain persistently high inflation.

Spot gold rose to $1,817.60 an ounce by, hovering close to Tuesday’s one month high, as a dip in US Treasury yields boosted the metal’s appeal by reducing its opportunity cost. US gold futures were up 0.3 per cent to $1,818.70. Spot silver rose to $23.12 an ounce and platinum rose to $962.00, while palladium fell to $1,889.00.

Gold prices have declined more than 4 per cent so far this year after rising 48 per cent over the previous two years, as the global economic recovery reduced demand for the safe-haven metal.

A stronger dollar makes bullion more expensive for buyers holding other currencies. This year gold traded between $1,676 and $1,959 an ounce, following its best annual performance in a decade last year, which also saw the metal touching an alltime high of about $2,072.50.

Gold held up reasonably well given all the pro-growth development and all the normalisation in monetary policy, an analyst said.

You could argue that if we did not have inflation, gold prices would already be much lower, adding that the gold’s performance for the year was quite positive for euro or yen investors.