Here are several factors that will most likely bring gold even lower in 2013:
1. Investor sentiment has weakened: although it's temporary and purchases tend to pick up once a lower price level has been reached
2. Physical demand for gold has declined: less gold was bought in 2012
and we're seeing a delayed reaction in the price - this was due to
various factors, partly because of the fact that small investors
overbought gold, so the current cheaper gold comes in as an opportunity
to them
3. QE Trimming by the US Fed: the Federal Reserve might reduce QE3 and it's most likely for the trimming to occur in 2013 - obviously the slowed-down pace of quantitative easing will propel the dollar higher and will push gold's price lower!
4. Weakening euro:
the euro is on the brink of collapse, but even if the long-predicted
crash doesn't occur, any negative euro-affecting factors will only
strengthen the dollar - cheaper euro means more expensive dollar and
this will drag gold down
Positive factors for gold would be, for instance: central bank purchases of gold, even small investors acquiring physical gold, but also appetite for ETFs - any of these, if occurring in substantial volume will propel the shiny metal's price higher.
The weakening dollar, negative US economy-related news also gives a boost to gold. Right now, the dollar is gaining strength - which is mainly due to the fact that other competing currencies, like the euro and the Japanese yen are devaluing. This makes the American fiat currency seem a lot stronger.
But: much of the gold traded is COMEX gold, exchange traded funds, not physical gold. Speculators play the metal's price up or down, they're only interested in the profit, but this as well, influences gold to drop or rise. The price is the same for physical gold as well.
For the 2013 - 2014 period there's a plethora of negative forces: the likeliness of gold dropping is extremely high.
