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Gold set for worst performance in six years in 2021

THE STRAITS TIMES – Gold was set for its worst performance in six years, though prices inched up in thin trade yesterday as United States (US) Treasury yields dipped, increasing the bullion’s appeal by reducing its opportunity cost.

Spot gold rose 0.2 per cent to USD1,818.43 per ounce by 1.19am GMT, hovering close to a one-month high hit on December 28, 2021. US gold futures were up 0.2 per cent at USD1,818.

Gold was set for its biggest annual decline since 2015, having fallen four per cent so far this year, as economies recovered from the coronavirus pandemic’s impact, reducing demand for the safe-haven metal.

Benchmark 10-year US Treasury yields dipped from one-month highs on Thursday, with no major catalysts to drive market direction and many traders out before the New Year holiday.

The dollar index moved away from a one-month low as investors looked beyond a surge in Omicron COVID-19 variant cases and favoured riskier currencies. A stronger dollar makes gold more expensive for buyers holding other currencies.

Gold bars are stacked in a vault at the US West Point in New York. PHOTO: AP

Wall Street closed lower on Thursday, retreating late in thin holiday volume from record highs set early in the session on strong US data including a drop in weekly claims for US unemployment benefits.

The dip in jobless claims came even as COVID-19 infections in the US hit a record high for the second day running, Reuters data showed.

Spot silver rose 0.3 per cent to USD23.11 an ounce, platinum gained 0.3 per cent to USD963.92, and palladium fell 0.5 per cent to USD1,956.42.

Silver was on track for its worst year since 2014 with a drop of about 12 per cent. Platinum was down nearly 10 per cent while palladium was headed for its biggest yearly decline since 2015 with a 20 per cent slump.