For the first time since 1998, gold posted back-to-back yearly declines.
The metal closed down 1.5 percent last year, compared with an average annual move of 12 percent in the past 14 years.
Prices touched a four-year low in December, as equities rallied and investors speculated that the US Federal Reserve is preparing to raise interest rates.
“Gold has had several problems,” George Gero, a precious metals strategist at RBC Capital Markets in New York, said in a telephone interview. “The improving US economy, the continued better labor picture, the lack of inflation, very strong stocks and the very strong [US] dollar weighed on gold in 2014.”
Yesterday, gold prices climbed amid concern that growth may be slowing from China to Europe, even as the US recovers, spurring demand for a protection of wealth.
Bullion for immediate delivery rose as much as 0.6 percent to US$1,188.46 an ounce and was at US$1,186.67 at 2:41pm in Singapore, according to Bloomberg generic pricing.
The metal is still headed for a 0.8 percent weekly loss with the US dollar poised for a third weekly advance.
Investors cut holdings in the biggest exchange-traded product backed by bullion by 11 percent last year, after a 41 percent reduction in 2013.
Assets in the SPDR Gold Trust were unchanged on Thursday at 709.02 tonnes, the lowest level since September 2008, after falling 0.3 percent on Wednesday, data compiled by Bloomberg show.
Gold for February delivery rose 0.2 percent to US$1,186.20 an ounce on the Comex in New York, compared with the close of US$1,184.10 on Wednesday.
Futures, which fell 1.5 percent last year, are still headed for a third straight week of losses.
“Gold’s still favorably looked at from the perspective of being a safe place to hold money,” Gavin Wendt, founder and senior analyst at Mine Life Pty in Sydney, said by telephone yesterday. “Although the US economy is performing very strongly, there are still negative patches out there in the world economy. The gold-price outlook is still very, very sound.”
While Societe Generale SA, Goldman Sachs Group Inc and Credit Suisse Group AG are among banks seeing further losses, Australia and New Zealand Banking Group Ltd joined TD Securities Ltd last month in calling for a rebound in gold prices this year.
Renewed economic concerns in Europe as Greece holds snap elections early this year may also bolster demand for gold as a haven, said Adrian Day, the president of Adrian Day Asset Management in Annapolis, Maryland.
“A growing crisis in Greece and weakness in global equities will likely continue, and that will boost gold,” Day said by e-mail. “Greece will dominate the dollar as a driver of gold.”
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