SPDR Gold Shares has seen net outflows of about $10.4 billion so far this year, the most since 2013, and equivalent to about 190 tons of bullion, according to the marketing agent for the fund. It’s come alongside declining gold prices as central banks start to pare back pandemic-era stimulus, though the emergence of the omicron virus variant and persistently elevated inflation have boosted potential risks to the global recovery going into the new year.

“There are more investors that we talk to that are willing to go into gold as a hedge against all this uncertainty — we’re seeing geopolitical risks, high inflation, and a low-yield environment,” said Robin Tsui, Asia Pacific gold strategist, Global SPDR Business at State Street Global Advisors. “We expect to see tonnage growing on a yearly basis, but it would be dependent on the gold price. We’re unlikely to see such significant outflows in 2022.”

Global markets are poised for a wave of central bank decisions on the timing of a pullback in stimulus, with the Federal Reserve expected to unveil a quicker tapering of bond purchases at the conclusion of its two-day meeting later Wednesday. That will pave the way for the first interest-rate increases since 2018 as officials pivot to restraining the hottest inflation in decades.

Tsui sees two rate hikes, probably starting in the second half of next year.

“When the Fed decides to hike, it’s not necessarily going to be bad for gold,” said Tsui. “All the news has been priced in, very similar to the cycle back in 2015, and also back in 2004, when the Fed increased interest rates as well, but gold spiked.”

Gold may trade between $1,800 and $2,000 an ounce in the first quarter — from $1,769.27 currently — as the projections for tightening have been priced in and the dollar may be flat after strengthening this year, said Tsui. A recovery in jewelry demand from biggest consumers China and India will also support prices, he said.

“Next year depends on the overall sentiment, but we’re not going to see the same situation between 2013 and 2015 when gold went through a painful bear market because the scenario in terms of the rates, inflation, and the equity risk environment is very different now.”