Last year was the best year for gold since 2010

Despite the global recovery of the economy, rising stock prices and a number of interest rate hikes by the US central bank, 2017 was not a bad year for gold. The Gold price rose by 13.6% in dollar terms, making 2017 the best year for the precious metal since 2010.

The total global gold stock in so-called exchange traded funds (ETFs) also rose last year for the second year in a row, as did the long position of hedge funds and other large speculators in the gold market.

Gold benefited from the depreciation of the U.S. dollar, prompting investors to seek refuge in alternative investments such as precious metals. The effect of the various interest rate hikes by the US central banks was also striking, as they once again turned out to be positive for precious metals.

Historically, the price of gold falls when interest rates rise, because the precious metal does not provide cash flow. But the interest rate hikes of the past two years have actually had a positive impact on the prices of gold and silver.

Gold price has risen sharply since Federal Reserve's latest interest rate decision

Gold price on an upward trend

The most recent interest rate hike on December 13, 2017 also proved to be an excellent time to get in, as since then the gold price has risen almost in a straight line from $1,245 to $1,317 per troy ounce. At the end of last year, the price of the precious metal rose for seven days in a row, the longest winning streak since June 2016.

Due to the increase in the price of gold, the 50-day moving average is higher than the 100-day moving average. This phenomenon is also referred to by technical analysts as a 'Golden Cross' and is known to be a very positive signal. Time will tell if that is the case again. In any case, gold has started the year on a positive note.

"Next year, gold may not benefit as much from a weak dollar as it did in 2017, but I think the precious metal will do well again despite that"Marty McGuire of TJM Investments LLC told TJM Investments Bloomberg.

In euro terms, the gold price remained almost unchanged in 2017, as the euro appreciated sharply against the dollar. As a result, at the end of last year, you were able to Buy gold for your euros as at the beginning of the year.