Gold Investment Driving Prices, Not Chinese Jewelry

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Although central banks will remain net buyers of gold in 2014, Perez-Santalla and Newman also discuss the recent controversial report from Bloomberg, seeking to double Beijing's "official" statement of how much investment gold the People's Bank currently holds.

The fact that gold prices held steady in the wake of the Fed on Wednesday is relatively good news, said Newman, but the so-far orderly scale-back of the US bond-buying program remains a risk. Investors are exceptionally cautious. We’re not seeing a return to the gold bull days of the past few years yet, he adds.

Last year was a good year for silver imports into India, says Philip. But now countries like Turkey, Brazil and Argentina are facing currency pressures that could impact precious metals prices.

As for gold, however, physical jewelry and coin demand is never going to drive prices higher. The investment market drives prices, Philip Newman concludes.