Well folks, I am still stuck in 2013 because my dad passed away on Sunday and the services – due to the weather here – are not until Saturday.  I am doing okay because it was his time and we’d said our goodbyes and I love you’s over the last year, but have a feeling I’ll be doing less okay on Saturday as I see in the eyes of all the people who knew and loved my father just what his passing means to them.  I’ll move into 2014 sometime after that.

Meanwhile, business goes on and part of our business here is to find the b/s, understand it and avoid falling victim to it.  Enter Gold’s prospects in 2014 look tarnished, a typical MSM piece filled with misguided perceptions for the public to consume.  The public after all, was put out of gold in 2013.

“The ghost of tapering has been there from March 2013,” said Chintan Karnani, chief market analyst at Insignia Consultants.

Tapering of what, the QE that caused gold to do so well prior to the ghost’s arrival?

Less money-printing “theoretically leads to less dilution of the U.S. dollar, which theoretically leads to less inflation, which logically would be bad for gold,” which is seen as a hedge against inflation, Adam Koos, president of Libertas Wealth Management Group, explained.

Theoretically Adam?  There was no apparent inflation at least in part because the act of first selling short term bonds while buying long term bonds (Twist) and then later buying the hell out of long term bonds dampened inflationary signals by holding all-important long term yields down.  Yet, here they are at an ultra important macro pivot point:

Gold cares about the spreads in yields, not the cartoonish notion that gold is anti-USD and a hedge against money printing.  Yes, it was very odd that gold declined so badly while money supply was ramping so aggressively, but that was part of the genius of the Bernanke Fed; they ramped money while tamping inflation’s signals.

“Unfortunately for gold bulls, there is no bottom in sight from a technical viewpoint, so what looked like a bottom-forming range has now broken out to the downside,” said Koos. “Gold buyers should wait till early-to-mid January and take a look at the picture then before they consider opening position at this point.”

You are right sir.  I have been saying this for months as well.  There are sensible targets in the low 1100′s and just below 1000.  But we have also been considering that everybody is bearish now and everybody can see the downside targets now.  So, is everybody going to be right?  Remember all the Euro crisis refugees who knee-jerked into gold in 2011?  Gold bulls should have been concerned right then and there.  Now people might want to be aware that a nice, neat bottom may not just announce itself so that all the knee-jerks can comfortably get back at the right moment.

The year 2013 certainly started out with promise — and expectations for $2,000 gold prices — but ended with forecasts for declines to $1,000 in the new year.

What does that tell you?

It was an “extraordinary year for gold,” said Julian Phillips, founder of and contributor to GoldForecaster.com.  “It started well with demand from Asia rising nicely, but then the prospects of stronger economic growth in the U.S. caused U.S. institutional gold investors to see the potential for greater profits in equities,” he said. Losses for gold futures in 2013 compare with a yearly gain in the S&P 500 SPX +0.40% of 29.6%.

What was the gold forecaster forecasting throughout 2013?  Anyway, we got on the theme of potential US economic growth 1 year ago as I got information from contacts in the field about just how strong the ramp up was in Semiconductor equipment companies and then as ratios like Palladium to Gold turned up.  That combined with the gathering of massive commercial shorts in silver and HUI’s loss of important support begged caution ever since.

The year 2013 was also a year that gold reacted “negatively to positive news,” said Insignia’s Karnani. “Gold should have risen in 2013 on tapering uncertainty,” but instead they fell, he said.

Gold “should have” done nothing of the sort.  “Tapering uncertainty” was a constant support to the US market, keeping something of a Wall of Worry going while gold supposedly inexplicably declined.  The fact is that the economy strengthened and the US Fed has come full circle… from reviled in 2011 to worshiped as heroes in 2014.

Gold prices also continued to fall during the U.S. government shutdown in October, which should have resulted in higher gold prices, he said. “If gold prices cannot rise on a [price] positive set of news flows, investors ought to be concerned over gold investment and they will be churning their portfolio for better returns.”

You people with the ‘should haves’.  That’s what gets everyone in trouble is this ‘should have’ mentality.  There are no ‘should haves’ in the markets.  There are only ‘what is’s’.

Phillips said he sees gold as having “stumbled.” It stumbled as demand was cut by 25% and as India “blockaded gold imports” and the U.S. increased global supply by 25%, he said.

Gold didn’t stumble.  It got cut nearly in half.  Stop trying to intellectualize it.

The article then goes on and on about India and blocked demand, but growth in India, China and the EM’s as key to gold’s success as an investment.

He expects real interest rates to increase in 2014, pressuring gold prices, but he also sees economic growth in emerging-market economies stabilizing, which could lead to better demand growth, if India removes curbs on gold imports.

Gold as a monetary metal is counter cyclical, not cyclical.

Overall, he’s generally “somewhat bearish” on gold prices in the new year due to better global economic growth, though he expects the price decline to be more modest and volatile this coming year than 2013’s.

Wait, you just implied economic growth would support gold, didn’t you?  But you are right, if economic growth is sustainable then gold should continue on an out cycle.  So is growth sustainable?

Yves Lamoureux, president of Lamoureux & Co., a market advisory firm based on behavioral economics, said he expects gold to bounce to $1,500 by the second quarter of 2014 “in tandem with lower interest rates,” but then fall significantly by the end of the year.

Lamoureux’s concerned about the possibility that the Fed has “mismanaged so badly their balance sheet” that the central bank may have to add to its stimulus measures by the summer of next year because of an economic slowdown. In turn, that would “blow the balance sheet to unmanageable proportions,” he said.

Tracking gold’s same behavior from 2013, which saw prices drop even as stimulus measures were in place and interest rates climbed, the metal’s prices may fall against a backdrop of more stimulus and as rates climb even higher, he said. So he’s keeping his $1,000 gold-price target for year-end 2014.

“Tracking gold’s same behavior”?  Is that what you are doing over there at your behavioral economics firm Yves?  Are you sure yours is not an extrapolation economics firm?

That suggests a second consecutive year of losses is in store for gold, though it probably won’t be as bad as 2013.

Myra, how you were able to tie all that gobbledegook above into a nice, neat little summary is beyond me.  But that’s why you get the big bucks over there at MarketWatch and I am a crank with a blog I guess.