The gold price ended the three-year series of declines and rose by 9.8% in 2016. Already in the first half of the year, the price of the precious metal grew, as the US Federal Reserve remained cautious with regard to the increase in interest rates. So in July, after the Brexit referendum the gold rose to a two-year high, as investors direct to assets havens.
However, in November the gold prices fell by nearly 8% amid rising yields on government bonds and upswing in the stock market caused in turn by expectations of more fiscal spending in the US Presidential mandate of Donald Trump.
On December 15, the gold fell to 10-month low, shortly after the Fed raise rates by 25 basis points and signaled it will tighten monetary policy faster than previously planned. The higher interest rates encourage the US dollar and so the currency becomes more attractive to investors looking for yield.
In the beginning of the new year, the gold recorded a modest decline of 0.03% to 1,151.35 USD per ounce.
The stronger dollar and higher interest rates usually create bearish market sentiment in gold, as the precious metal is denominated in dollars and thus difficult to compete with assets yield.
Silver, in turn, finished 2016 with growth of 15%, which is the biggest annual rise since 2010.
The copper rose about 19% last year.