The price of gold endured its worst year since 1981 as the US economy improved, inflation remained at bay and worries about the financial system and gridlock in Washington faded.

Gold slumped by 28pc in 2013. The price peaked at $1,900 an ounce in August 2011 and has been declining steadily ever since.

Traders had bid the price of gold higher partly out of fear that the Federal Reserve's aggressive easy-money policies would lead to inflation and weaken the US dollar. When that didn't happen, demand for gold fell.

On Tuesday, the actively traded February contract for gold dropped $1.50, or 0.1pc, to $1,202.30 an ounce.

Silver for March delivery declined 24.5 cents, or 1.2pc, to $19.37 an ounce. Silver also had a bad year, falling 36pc.