The year that killed the Fabia Combi is coming to an end. Take a look at the main car events of 2021

The price of gold for this year is falling by almost four percent, the most since 2015, and further gold losses, according to analysts, await next year due to the expected increase in interest rates. Other precious metals – silver, platinum and palladium – also fell sharply, Reuters reported.

Today, the price of gold is rising slightly due to the weakening dollar and global stocks. On the spot market, the price rose to USD 1,827.26 (over CZK 39,900) per troy ounce (31.1 grams), which was the highest value since November 22.

Gold has fallen this year as the global economic recovery has attracted investors to riskier assets and reduced their interest in safe assets such as gold bars. Added to this are indications that central banks will accelerate the reduction of asset purchase programs to kick-start the pandemic economies.

Gold is considered an insurance against inflation, which is usually the result of extensive stimuli. However, the increase in interest rates would translate into higher opportunity costs from holding gold that yields no interest and increase US government bonds and the dollar. Opportunity costs are offset by not taking advantage of the best alternative. DailyFX analyst Warren Venketas believes that with 10-year US government bond yields expected to reach 2 percent in 2022, temporary inflation and higher interest rates may be expected to fall. The US Federal Reserve (Fed) is expected to raise interest rates three times next year.

Exinity analyst Han Tan adds that while higher interest rates could jeopardize the attractiveness of gold, on the other hand, it may be supported by concerns about the impact of the omikron variant. It could also help if the Fed’s policy turned out to be wrong, inflation remained high and geopolitical tensions rose.

Of other precious metals, silver is down 11.8 percent this year, the most since 2014. Platinum is losing 9.4 percent this year, the biggest drop in three years. The price of palladium has fallen by 22.2 percent this year and recorded its first decline in six years.

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