Gold Ingots
Gold ingots of 999 purity, used for the production of gold medals for the 2014 Winter Olympic Games in Sochi, are seen at the Adamas jewellery factory in MoscowReuters

A majority of all gold forecasters are sticking with their bearish forecasts for 2014 even after the precious metal logged its best start to a year since 1983.

"I just see this as a corrective move," said Robin Bhar, the head of metals research at Societe Generale in London, and the most-accurate forecaster tracked by Bloomberg over the past two years.

"We would still want to be bearish about gold," said Bhar, who predicts a fourth-quarter average of $1,050.

"Haven demand plays well when gold is cheap, but it's no longer cheap," said Justin Smirk, a senior economist in Sydney at Westpac Banking and the second most-accurate forecaster tracked by Bloomberg over the past two years.

"I'm a little surprised by the volatility in the market, but it really doesn't change my overall view," Smirk said. He anticipates a slide through the year to a fourth-quarter average of $1,020.

Credit Agricole CIB said in a 17 January note to clients: "... Despite the firmer tone to risk, gold prices have continued their ascent, closing above their 200 day moving average at the end of last week.

"We don't expect the rally in gold prices to be sustained. Some market consolidation is likely [on 17 February] with a lack of key data releases and a US holiday (President's Day) keeping activity subdued."

Bullion's gains will "run out of steam" without a "more meaningful shift" in investor sentiment, Suki Cooper, a New York-based Barclays analyst said in a 14 February note to clients.

Prices Surge

Gold futures rose 9.7% through 14 February, bouncing back from the biggest annual drop in over three decades, and struck a three-month high. Holdings in exchange-traded products backed by bullion increased by 3.2 metric tonnes last week, the most since December 2012, after slumping 869.1 tonnes in 2013 when prices crashed 28%.

Goldman Sachs analysts led by Jeffrey Currie, the head of commodities research in New York, said in a 12 February report that gold would "grind lower" as US growth improves, reaffirming a forecast for prices to hover at $1,050 by the end of the year.

The likelihood of weakening currencies in emerging-market economies will increase the risk of further declines for gold, "given the price-sensitive nature of jewellery demand in local currency terms," Goldman said in its report last week.

The Indian rupee has depreciated by 12% against the US dollar over the past 12 months.

Bullish Bets

Gold prices are expected to extend their 2014 recovery and hit $1,400 an ounce later in the year, the highest since September, according to analysts at Citi Futures and RBC Wealth Management.

Prices settled above the 100-day moving average for a second straight session on 11 February, a first since October.

Gold futures for delivery in April rose 1.2% on 11 February to $1,289.80, capping a fifth session of gains. The 100-day moving average is near $1,270.71.

The precious metal has also closed above its 50-day gauge in every session since 23 January.

That pattern indicated prices would rally 8.5% by the end of March 2014, said Sterling Smith of Citi Futures.

Prices would reach $1,400 by the end of 2014 if open interest, or the number of contracts outstanding, was to rise, said George Gero, a vice president at RBC Wealth Management.

Physical Demand

Prices began to rebound last month on indications that physical demand in Asia, the biggest gold consumer, had risen.

China imported 1,158 tonnes of gold through Hong Kong in 2013, more than double its 2012 total; and also imported gold through Shanghai but those numbers are not available.

Meanwhile, domestic production rose over 6% to 428.16 tonnes in 2013, the China Gold Association (CGA) said on 10 February. Gold consumption in China, now the world's largest gold consumer, hovered at a record 1,176.4 tonnes last year.

Deutsche Bank, in a 31 January report, said "powerful physical flows" to China and India and the probability of a weaker dollar were supporting gold.

Meanwhile, the UK's Royal Mint said on 8 January it ran out of 2014 Sovereign gold coins, and mints the world over reported a surge in coin sales.

More Bears

Morgan Stanley analysts including Joel Crane forecast "more pain to come" for gold investors in a 22 January report. The bank has cut its 2014 target by 12% to $1,160.

The 28% drop in prices in 2013 was the biggest in 32 years.

Bullion soared more than 500% in the 12 consecutive years of gains through 2012. The metal struck a record high $1,923.70 in September 2011.