not proved particularly positive for gold this year, due to the pressure they have put on the euro versus the dollar, strength in which tends to weigh on the price of assets denominated in the US unit.
When Spanish bond yields topped 7% in July, gold prices were still languishing around their lows for the year.
US real interest rates have been at ultra-low levels throughout the year, without driving prices significantly higher, while US and euro zone inflation expectations remain anchored despite loose monetary policy.
A rise in real interest rates is perhaps the biggest threat to stronger gold prices as they increase the opportunity cost of holding the metal rather than higher yielding instruments.
In a note this month, Goldman Sachs said a stronger US growth picture may prompt just such a rate rise, and consequently a turn in the gold market cycle, next year.
“Our... modeling suggests that improving US growth outlook will outweigh any Fed balance sheet expansion, and that the cycle in gold prices is near an inflection point,”it said.
But stronger growth next year, as Goldman points out, is by no means certain, particularly with the approach of the so-called fiscal cliff in the US.
If tax hikes and spending cuts worth $600 billion arrive in the new year, they could spark another recession.
Uncertainty about the 'cliff' prompted economists polled by Reuters in November to cut early 2013 US growth expectations for the fourth straight month. For 2013 they expect a 2% growth rate, but some say growth forecasts would be 1-1.5 points higher without this threat.
If negotiations fail to avert the crisis and US growth stalls, gold prices could rally. In addition, a sharp rise in inflation that central banks struggle to control could also spark a jump in prices, because gold is viewed as a solid store of value.
For sure, gold still has its friends. Demand for physical gold and physically backed investment products is strong, with the amount of metal held by gold exchange-traded funds, which issue securities backed by physical bullion, rising to a record highs in recent months.
Gold coin demand, which fell in the first three quarters of this year after rising to nearly 40 million ounces in 2011, is also showing signs of recovery. US Mint gold American Eagle sales posted its strongest November for 14 years last month.
Physical demand in India, though sharply lower this year, is holding up surprisingly well given the weakness