The Fed's decision to start cutting economic stimulus due to the obvious improvement serves as a sentence for gold to rise. The main reason for the sharp increase in the price of "yellow metal" in 2007-08 was the beginning of the mortgage crisis in the United States and the overall drop in market confidence to currencies. The first pioneers who started buying gold are the central banks, thus hedge their risks against the backdrop of the global financial crisis.
But reaching maximum values in September 2011 due to a lack of support of Eurozone’s breakup and the beginning of the stocks growth as a result of the direct action of the Fed and other central banks, gold's appeal as a safe haven asset started to decline.
Considering the prospects of the gold market in the new year it can be assumed that the precious metal will continue to decline further due to the strengthening of the U.S. dollar. Dynamics of the 10-year U.S. government bonds indicates directly that the yield on them approached a level close to 3%.
