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Message: Gold price - story continued
Gold will continue to attract increasing monetary demand and the result will be a much higher price," said Peter Spina, an analyst at GoldSeek.com. "Sub-$1,000 gold days are drawing to a close [and] by the end of this year, I would find it difficult to explain a sub-$1,000 gold price."
Meanwhile, "global macro-economic and currency markets ... look awful with little effective action going on to rectify matters," Phillips said.
Since January, the U.S. dollar has weakened against every major currency except for the Canadian dollar, Kathy Lien, chief strategist at DailyFX.com said in a research note issued on Monday.
And gold has been moving in the opposite direction of the U.S. dollar over the past few months. "The gold price is and will be more influenced by currency and economic factors than by physical demand," said Phillips.
Strength in oil has helped drive prices for gold higher as well. Prices have reached record levels well over $140 per barrel. See Commodities Corner.
But the price for "paper oil" may be "over extended," said Ned Schmidt, editor of the Value View Gold Report. He expects oil prices to fall below $100 per barrel by the year's end.
"Gold may still need to test $850," before summer is over, to put a final bottom in place, he said. "This would allow for gold to move back to more than $1,000 by New Year's Eve."
Physicality
Later in the year, the gold market usually sees an uptick in physical demand.
From the middle to the end of August, the Indian market "revives" following the harvest gathering and after the monsoons, said Phillips. Some 70% of gold buyers come from the agricultural sector in India and then they stay in the market until May the following year, he said.
No tax is paid on agricultural profits so in India "it disappears from view into gold and property," said Phillips. Also, the "developed fabrication world begins to buy in September to fabricate in time for the year-end festivities."
Given that, "gold's high season lies in the final and first quarter of the year," Phillips said. So "expect a 'golden' second half for precious metals.
Price guess
Blanchard expects gold to continue to climb and likely pass the $1,000 mark at some point in the next few months, then reach $1,150 by the end of the year, said David Beahm, a vice president at the coin and precious metals retailer.
Nadler said Kitco has raised its initial 2008 trading range estimate for gold by "only a small margin" -- to $730-$1,030, from a range of $640-$940.
Kitco expects the average price to mark a slow decline from the $910 area to the mid-$800s as the market approaches the end of the year.
"Barring surprise geopolitical developments or significant financial implosions, which could catapult the metal to new pinnacles for a brief shining moment, the outlook is for a U.S. dollar recovery in the second half and for a retreat in gold towards the $730 area it initially touched back in May 2006," said Nadler.
But overall, O'Byrne sees the situation for the gold market -- weak supplies, increasing investment demand macroeconomic and geopolitical risk -- as "a very toxic combination."
And in "these circumstances, it is absurd to suggest that the gold price could fall materially from these levels in the second half of the year," he said.
"The inflation adjusted high of some $2,300 per ounce remains a very likely price target in the long term and looks more likely with every passing week," said O'Byrne. 
Myra P. Saefong is MarketWatch's assistant markets editor, based in San Francisco.
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