• Silver worst year since 2014
  • For the year, platinum is down about 9.4% so far, palladium 22.2%
  • Gold faces ‘downhill battle’ amid 2022 rate hikes – analyst

Dec 31 (Reuters) – Gold prices marked their biggest annual decline since 2015, hampered by a resurgent dollar, as investors prepared to usher in a new year in which the money supply could be tightened as even as 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 (6:46 p.m. GMT), after hitting a high since November 22 at 1,827, $26 on Friday, helped by a pullback in the dollar and global equities.

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

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Gold is down around 4% in 2021 as the recovery in the global economy pushed more investors into riskier assets and dampened interest in safe-haven assets such as bullion. Read more

Added to this mix were indications that central banks would be accelerating the rein in of their pandemic-induced massive money printing to revive the economy.

Although bullion is seen as a hedge against inflation that usually results from widespread stimulus, interest rate hikes would translate into a higher opportunity cost of holding gold, which does not bear interest. , and would boost US Treasuries and the dollar.

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

Gold shows annual decline

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

While concerns about the effect of the Omicron variant could support gold, higher yields could tarnish its appeal, said Han Tan, chief market analyst at Exinity.

At the same time, “gold could see several catalysts for substantial gains next year, whether it’s a Fed policy mistake, stubbornly high inflation, or even a spike in geopolitical tensions”.

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

Platinum rose 0.4% to $965.10, with a year-over-year decline of more than 9%. Palladium fell 3% to $1,906.27, posting its worst annual decline since 2015.

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

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