(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Ian Campbell

LONDON, May 17 (Reuters Breakingviews) - For gold investors, the bad news literally outweighs the good. The gold price looks headed down and may repeat April's big falls. The pace of decline depends on U.S. data and the Federal Reserve.

The good news weighs in at 60 tonnes, the increase in demand for gold for jewellery in the first quarter. That is a 12 percent increase over the previous year, according to the latest figures from the World Gold Council, although total jewellery demand of 551 tonnes was still lower than two years before. On the other side of the scale is a far heavier weight: the 195 tonnes decline in investor demand - a colossal 49 percent fall.

There is another broad split within investment flows. Physical demand for gold bars and coins was 10 percent higher. American Eagle coins, for example, sold well in the United States. Cautious folk may be stocking up in case central-bank money printing goes terribly wrong. But investors in exchange-traded funds were stampeding away - a cool $9.3 billion net sale - afraid of an imminent end to the Fed money printing that turned safe-haven gold into a golden speculative bubble.

"Feel it in your hands" gold-bugs are unhappy about lily-livered ETF investors, although they didn't complain when the ETF crowd stampeded into the metal. Yet while gold-bar investors may move more slowly than ETF ones, they ultimately may be thinking the same way. Investment in physical gold trebled between 2007 and 2011. These inflows too are likely to reverse.

More big price drops could come soon. For chart-watchers the next key number is $1,322, the level to which a precious ounce of gold plunged in April, before bouncing. If that low point is broken, the subsequent downside may be steep. Jewellery demand won't offset the sheer weight of investment selling until gold gets much cheaper - say $1,000.

The best near-term hope of price support is the gold-bugs' arch enemy, Ben Bernanke, the Fed chairman. A worsening U.S. soft patch and dovish, money-printing words from him could nourish gold-friendly fears of another money-printing binge. But unless the U.S. recovery derails completely, the future remains the same. The investors who stampeded in will carry on stampeding out.

CONTEXT NEWS

- Gold fell in European trading on the morning of May 17 for a seventh straight session, its longest losing streak since March 2009, to $1,381 an ounce. Gold lost nearly 6 percent of its value in the six sessions to May 16.

- The World Gold Council's report on first-quarter demand showed total global jewellery demand up by 12 percent year-on-year, driven in the main by Asian markets. Jewellery demand in China was up by 19 percent on the same period last year and stood at a record 185 tonnes. However, overall total global demand for gold in the first quarter was 963 tonnes, down by 19 percent from the fourth quarter of 2012 and by 13 percent on a year earlier as overall investment demand fell year-on-year by 49 percent.

- Graphic: Commodities performance in 2013

http://link.reuters.com/reb25t

- World Gold Council release http://link.reuters.com/pyr28t

- Reuters: PRECIOUS-Gold falls further in longest losing streak in four years

- For previous columns by the author, Reuters customers can click on

(Editing by Edward Hadas and Sarah Bailey)