Brenda Kelly, Market Strategist at IG Markets, on gold and its future prospects

In my opinion, the figures that we got through executed close of above $1,415 per ounce was the detriment to gold prices, as that would have been a key turning point. In general, since 1984 we have seen gold prices declined only 10 times out of 13 in September. Despite the fact that we have experienced unprecedented QE and uncertainty in the markets, price failed to capitalize on that. I expect any break below the $1,300 mark poses the scene for a potential return to this year's lows of $1180. 

In addition to that, as far as the fundamental scenarios are concerned the important fact is that India, one of the world's biggest gold consumers, increased income tax from 10% to 15% on gold jewellery imports, which can create a barrier to any upside trend in gold. Given that it is currently wedding season in India, it may or may not have a huge downside effect.

I believe it is important to know that it was not only the gold that rallied. We have seen quite a big move in all metals like copper and silver. That was mainly due to a weaker Dollar, as the Fed refrained from tapering QE. Nonetheless, gold did bounce of $1,292 and drew back to $1,300 per ounce mark. However, I believe that in order to reverse the current overall trend from the fallback of $1800 per ounce, gold will need to get a break and preferably close on a weekly basis above $1,433, which was the highest what we saw in August. In general, remaining above $1,350 gives the possibility of this actually happening, but unless gold remains above that particular level, I do fear that trajectory still remains in a downside trend for gold. We could expect to see appreciation of the Dollar in the next few weeks as the markets become a little bit more used to what is going on and stop trying to track and guess further actions of the Fed. We do believe that until unemployment rate comes down to around 6.5%, we might not see any tapering in the Fed's asset purchasing. Moreover, I anticipate that when the new chair comes in, most probably it would be Janet Yellen, then tapering might actually start later in 2014. I expect to see volatility in gold prices and of course with inflation worries in the U.S. the policy makers do have a little bit of room to keep the monetary policy as it is and I do not believe inflation is actually of any real key concern, which supports gold price.

We anticipate the market to hold mark of $1,200 per ounce by the end of the year, as in fact it is the cost of production. Personally, I expect to see bullion prices around $1,217 per ounce by the end of the year.