7 factors that will decide gold's price this year

Image: A customer tries on a gold necklace in Hanoi, Vietnam.
Photographs: Nguyen Huy Kham/Reuters 

Societe Generale, a major European bank, has a note out asking whether 2013 will be the first year since 2000 that gold ends the year down, according to Business Insider. In it, they present the bullish and bearish argument in the simplest manner possible, it says.

Let's take a look at the arguments that will decide the price of gold this year.

See the negative factors that could have a bearing on the yellow metal...

Image: An employee looks at gold jewellery at a shop in Hanoi, Vietnam.
Photographs: Nguyen Huy Kham/Reuters

Equities stand at their lowest level since 20 years, relative to gold, making the latter less attractive.

Image: An employee displays gold jewellery in Russia's Siberian city of Krasnoyarsk.
Photographs: Ilya Naymushin/Reuters

The dollar could appreciate and interest rates may rise amid signs of a stronger economic recovery.

Image: Women walk past the Emirates Diamonds shop at Gold and Diamond Park, a shopping mall specialised in gold and diamond retailing, in Dubai.
Photographs: Jumana El-Heloueh/Reuters

Inflation is still under control.

See three factors that could have a positive bearing on gold...

Image: A woman displays a small gold coin next to Europe's largest gold coin in a shop in Vienna, Austria.
Photographs: Herwig Prammer/Reuters

Currency wars and renewed monetary easing could push gold higher.

Image: Japanese ornamental 'hina' dolls, made of pure gold, is unveiled at the Ginza Tanaka store in Tokyo.
Photographs: Yuriko Nakao/Reuters

Demand from emerging countries may increase.

Image: A woman is reflected on the window of a jewellery shop where gold bangles are on display in Istanbul, Turkey.
Photographs: Murad Sezer/Reuters

In the long run, gold may play a role in the transition to an international currency reserve system.

See the most important question of all...

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Image: A store keeper arranges gold jewellery in Kathmandu.
Photographs: Navesh Chitrakar/Reuters

The most crucial question, really, is the interest rate one. If real interest rates in the US begin to normalise, gold will likely get crushed, as Goldman Sachs (and others) have pointed out lately, according to Business Insider.

Source: Business Insider