Where now for gold?

Central bank gold reserves, fiscal and political tensions, oil prices, foreign exchange rates, hedgers (gold miners), key indicators of developed economies (especially US), etc, collectively shape gold prices and investors actions. Lately these forces have turned gold from a remedy in periods of high uncertainty to a highly uncertain asset itself. These forces have collectively come into action like never before in the form of ever rising tensions between Iran and US (effecting sentiment regarding the oil), poor performing eurozone economies, rising demand from the developing markets, quantitative easing plans of Fed, record high gold purchases by central banks, questionable strength of major currencies, etc. Most of the above mentioned events are putting an upward pressure on gold prices, however, recently there has been a small correction in the bullion market; the correction came in line with the improving US employment statistics. The unemployment in US fell by 0.2 percent in January and stood at 8.3 percent, the unemployment rate has fallen by 0.8 percent from August. Improved employment numbers have certainly affected the sentiment of worlds biggest gold future market (New York mercantile Exchange). However, it is hard to believe that the bearish trend would continue in the long run. In addition, the recent $100 slump that came after the appearance of rumour regarding Feds quantitative easing plan, shows that precious metal is at a level that is not fundamentally justified. Going further leading commodity analysts are also setting up new lower support levels for gold. On the contrary, some analysts believe that prices would remain bullish in the long run as strong demand would prevail, especially from the central banks who doubt that the major reserves currencies would strengthen. In other words, unless the crises of worlds biggest economic bloc are resolved, gold would remain strong. The multidimensional intertwined dynamics of gold markets have made gold a very complex commodity to predict; however, by and large the consensus is that gold would continue its 12-year-long bullish rally in the time to come.