Gold prices celebrate the new year with biggest annual loss in 32 years
Gold fell in thin holiday trade, heading for its biggest annual loss in more than three decades at nearly 30 percent, as rising appetite for risk and the prospect of a global recovery tarnished its allure.
European stocks hovered around five-year highs after two weeks of strong gains, following from a six-year peak in Japanese shares.
“What’s currently driving investors is the idea that commodities are out of fashion and equities are in demand,” Quantitative Commodity Research owner Peter Fertig said.
“And, with low inflation pressures, there is still some downside risk for gold as long as the stock market remain relatively robust.”
Gold is usually seen as an hedge against inflation, which has stopped to be a cancer for investors for the time being.
Spot gold fell to a session low of $1,200.79 an ounce in earlier trade and was down 0.6 percent to $1,205.40 by 1456 GMT, while US gold futures for February delivery slipped $9.00 to $1,204.90 an ounce.
Gold’s performance in 2013 has put an end to 12 straight years of growth, with prices hit by the US central bank’s decision to rein in its monetary stimulus, which will raise the opportunity cost of holding the non-yielding asset.