Gold And Related ETFs Experience Biggest Loss In Years Amid Record Inflation

Despite ending the year with a modest gain, in 2021 gold experienced the steepest year-over-year drop since 2015, signaling a lack of interest by investors amid the largest inflationary rise in nearly 40 years. Data from the world's biggest gold-backed ETF, SPDR Gold Shares (GLD), reflected the trend with its largest outflow in a decade. GLD was one of the biggest losers in 2021 ETF trading, experiencing nearly $11 billion in outflows with its price falling 5.5% over the year. The ETF ended the year with a total net asset value of $57.1 billion.

Gold has traditionally been considered a safe bet and a hedge for inflation, but the precious metal underperformed while growth investors turned their attention to real estate and stocks. GLD, currently trading at 169.67, experienced its biggest drop in the first quarter before peaking at 178.77 in June 2021, then spending the rest of the year fluctuating before ending with an overall loss. As the Fed signals interest rate hikes in 2022 to combat inflation, some experts project that gold itself will hover around $1700 per troy ounce, while others expect a steady decline instead.

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