Because of aggressive rate increases in the R US Federal Reserve which have reduced the attractiveness of non-productive bullion, the price of Rsquo; or strengthened on Friday, but was heading for a second consecutive annual loss.

At 0309 GMT, spot gold was up 0.2% to $1,818.64 per ounce, while U.S. gold futures fell 0.1% to $1,824.60. According to Ilya Spivak, head of global macro at Tastytlive, “for most of the year, gold was under pressure from a Falcon Fed. But at the end of the year, it recovered somewhat and received a lifesaver thanks to expectations of a slowdown by the Fed.”

In a context of strong interest rate hikes by the Fed, the bullion was headed for an annual fall of 0.6%, with the dollar emerging as the preferred safe haven. The Dollar Index was about to have its best year since 2015, making gold expensive for foreign currency holders.

After four consecutive hikes of 75 bps each, the Fed raised interest rates by 50 basis points (bps) in December. On the other hand, higher rates increase the opportunity cost of holding gold because it pays no interest.

So platinum and palladium will probably suffer, the recession hits industrial demand in 2023. Platinum remained stable at $1,054.86 and palladium was little changed at $1,814.75 and cash rose 0.4% to $23.97. Palladium was headed for an annual decline of 4%, silver and platinum were both headed for an annual increase.