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Wednesday, January 1, 2014

Gold closes out worst year since 1981

Gold drops 28% over 2013

Published: 01 January, 7:48 AM

NEW YORK — The price of gold closed out its worst year since 1981 yesteday (Dec 31) as the United States economy improved, inflation remained at bay and worries about the financial system and gridlock in Washington faded.

Gold slumped 28 per cent last year. The price peaked at US$1,900 (S$2,400) an ounce in August 2011 and has been declining more or less steadily ever since.

Traders had bid the price of gold higher partly out of fear that the Federal Reserve’s aggressive easy-money policies would lead to inflation and weaken the US dollar. When that did not happen, demand for gold fell.

Yesterday, the actively traded February contract for gold fell US$1.50, or 0.1 per cent, to US$1,202.30 an ounce.

Silver for March delivery declined 24.5 cents, or 1.2 per cent, to US$19.37 an ounce. Silver also had a bad year, falling 36 per cent.

In other metals trading, copper for March delivery rose 1.4 cents, or 0.4 per cent, to US$3.3965 a pound. Copper fell 7 per cent for the year. Platinum for April delivery rose US$6.60, or 0.5 per cent, to US$1,373.80 an ounce. It is down 11 per cent for the year. Palladium for March delivery rose US$7.50, or 1 per cent, to US$718.30 an ounce. For the year, it is up 2 per cent.

Other commodities also had a bad year.

The price of corn plunged 40 per cent last year as it became clear that the US crop would be huge, bouncing back from a severe drought the year before. The price of wheat also fell 23 per cent for the year.

Yesterday, the price of corn for March delivery fell 1.5 cents, or 0.4 per cent, to US$4.22 a bushel. It started the year at about US$7 a bushel.

Wheat for March delivery rose 4.75 US cents, or 0.8 per cent, to US$6.0525 a bushel.

Soybeans for March delivery fell 16.25 US cents, or 1 per cent, to US$12.925 a bushel.

In energy trading, the price of crude oil fell 87 US cents, or 1 per cent, to US$98.42 a barrel. Wholesale gasoline lost 2 US cents to US$2.79 per gallon, heating oil was unchanged at US$3.08 per gallon and natural gas fell 20 US cents to US$4.23 per 1,000 cubic feet.

For the year, oil gained about 7 per cent, heating oil and gasoline each rose 1 per cent while natural gas jumped 25 per cent. AP

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