Last year saw the gold price record its first calendar year decline since 2018, falling 4 per cent to end the year at $US1820 ($2500) per ounce of gold, according to the Perth Mint.
The price of gold finished 2020 at $1887 and was affected in 2021 by factors like a rising US dollar (up 6 per cent in 2021), the vaccine rollout reducing investor fears, improving economic growth forecasts, and the strength of digital assets like Bitcoin (up 65 per cent in 2021).
The Perth Mint noted that most of the decline in 2021 was seen during the first quarter, with improvement enjoyed since.
“From the end of March through to end December, gold trended higher, supported by rising inflation rates and a renewed decline in real bond yields,” Perth Mint manager for listed products and investment research Jordan Eliseo said.
The final two months of 2021 were especially positive, as gold prices rose from about $1750 to begin November, up to $1850, before settling at $1820 to close the year.
And while prices did decline for the first time in three years, the Perth Mint’s annual sales were at their highest for any calendar year in the last decade.
The Perth Mint sold a record 1,050,242 troy ounces of gold and more than 19 million ounces of silver for 2021.
This came as the World Gold Council reported November 2021 as being just the second month in the year to fall into net sales rather than purchases.
This was the world’s central banks’ first monthly decline in official gold reserves since January 2021.
Eliseo concluded with positivity for gold prices into 2022, showing understanding that for a commodity to rise, it must endure a trough.
“It’s worth noting that gold has now worked through a roughly 15-month time period that at its worst saw prices correct by almost 20 per cent from peak to trough,” Eliseo said.
“Corrective cycles like this are part and parcel of every market, and indeed are often a healthy development as they allow the market to rid itself of excess froth and speculation.”