2014 was a year of mixed results for the gold market. The price of gold started the year at $1,195 per ounce and reached a high of $1,386 in March. The price of gold in 2014 was characterized by a lack of a rebound from its 2013 plunge and a topsy-turvy year due to conflicting economic and geopolitical factors.
However, the rest of the year saw a decline in the price of gold. In June, the Federal Reserve hinted at the possibility of raising interest rates, which sent the gold market into a downward spiral. By the end of the year, the price of gold had dropped to $1,184 per ounce, a decline of nearly 10 percent from its peak earlier in the year.
In addition to the Federal Reserve’s actions, several other factors also contributed to the decline in the price of gold in 2014.
- The improving economic conditions in the United States and Europe, along with the slowing of China’s economy, led to a decrease in demand for gold as an investment. The rising stock market also played a role in this decrease, as investors favored equities over precious metals.
- Despite a modest 2% decline in gold prices for the year, the price of gold saw fluctuations throughout the year as investors responded to rising geopolitical tensions, such as the crisis in Ukraine, and sought safe-haven status in gold.
However, the gradual removal of Federal Reserve stimulus and the upward trend of the US dollar, which was driven by the strong US economy and a weaker European economy, limited the growth of gold prices. The popularity of gold as an investment declined as a result, with a decrease in investor interest in the gold ETF SPDR Gold Shares and a drop in its total reserves to 23.2 million ounces. Going forward into 2015, the future of gold prices remains uncertain as economic and geopolitical factors continue to play a role in determining its value.
In 2014, the metal remained a popular investment option. Investors continued to purchase gold as a hedge against inflation and currency devaluation, and central banks around the world added to their gold reserves. 2014 was a year of ups and downs for the gold market. The increasing demand for safe-haven investments early in the year was offset by the declining demand for gold as an investment later in the year. Despite this, gold remained a popular option for investors looking to hedge against inflation and currency devaluation.