In its latest Precious Metals Daily note, UBS says gold is currently in need of inspiration. This view is supported by the fall seen so far in trade on Monday, but it does seem to fly in the face of the bullishness expressed by commentators in the days following the announcement of QE3.
The bank is quick to point out that the yellow metal has jumped over 2% higher post-QE3 but, it adds, the bulk of that was move done on the day of the Fed's announcement.
"The desire to go higher is clear, but so is the hesitancy to aggressively chase the market upwards. Many are waiting for a deeper correction that would allow them to jump in at better levels."
And, as UBS points out, "With spec positioning now elevated on a relative basis, the reluctance is understandable: gold spec positioning at 28.1 Moz is at the highest in over a year, and sits at 85% of the all-time high."
So, the question then becomes, is the hoped for correction likely to come or, is it instead going to prove a futile waiting game?
Barclays agrees that gold's price response to further quantitative easing has been to capture the bulk of the gains ahead of the announcement but, adds, "in our view, the investor space lends one of the most positive aspects. Physically backed gold ETPs have gained momentum to set a fresh record high but speculative positioning, which has risen, is not overextended."
Indeed, UBS remarks, "What's been quite evident over the past week is that buyers are very eager to step in on dips such that any move lower has been short-lived. There is a risk that no such better buying opportunity will present itself, as we saw after QE1 when gold simply proceeded to make higher highs and higher lows."
As Barclays, points out, "Disappointment over earlier implementation of QE has not been gold's only hurdle this year; it has also struggled to conquer dollar strength and regain its safe-haven status and has instead benefited from a risk on environment."
Over the longer term too, the fact that real interest rates are likely to remain negative for an extended period also bodes well for gold, especially given the inflation concerns that come with QE3.
As Barclays says, "Given that the macro backdrop has become increasingly supportive, we have revised up our Q4 12 gold price forecast to $1810/oz and our 2013 annual average forecast to $1860/oz.
For Natixis Bank, however, the effect of the QE3 announcement has for now been anticipated in the gold price but, there other reasons to be positive on the price of the yellow metal.
"The market will instead turn to the question of the imminent US "fiscal cliff" and the need for an increase in the country's debt ceiling shortly thereafter. It is worth recalling that the peak in gold prices in 2011 was related not to QE, but to growing concerns about the health of US finances, and the prospect that the US may be suffering from problems similar to those of European governments."
For Natixis, the question of the debt ceiling and those associated with it are much more likely to influence the price of the yellow metal over the short term than QE3. But, it cautions, that assumes the Fed isn't successful in its efforts to boost the housing market. If that does happen it says, "it could have a negative impact upon US demand for precious metals."