Debate over the gold price sees forecasts widen sharply...
GOLD BULLION is an "ageing athlete" and "a broken commodity" on its way to $1000 per ounce, according to Dennis Gartman, founder and publisher of trading advisory The Gartman Letter.
On the contrary, James Steel, chief commodities analyst at HSBC in New York, sees gold rising to $1600 per ounce in the second half of 2013, before rising above $2000 per ounce longer term.
According to Steel, speaking to Bloomberg last week, jewelry demand used to drive the gold price. But now it is bullion demand and increasingly investment demand from China that drives the gold market.
"Despite the slackening growth recently, HSBC and other researchers are still projecting greater growth in the next 5 to 10 years which will create a lot of retail demand," he says.
With the trend pointing downwards, and looking at his analysis of price charts, Gartman says the Gold Price
will fall to $1000 if the next support level at $1200 is broken.
"The oldest rule in commodity trading," he added – pointing to ongoing zero interest rates and money creation by central banks worldwide – "is when something can't rally when the news is bullish, it's a bear market."
HSBC's James Steel sees gold rising later year
. He compared the market to a rugby scrum, pulling back and forth near the $1400 per ounce level, between Western gold investor outflows and strong physical demand, mostly in China, for gold coins and gold bars.
"Demand in India has been damaged" by recent changes in gold import rules, Steel added, but demand in the world's largest gold consumer market "generally comes back."