Most market eyes are focused on the outcome of today’s FOMC meeting and whether or not Ben Bernanke will give anything away in terms of the Fed’s tapering plans, which seems an appropriate way to end 2013, as the will-they-won’t-they taper saga has been looming ominously close to the gold price for much of the year.

And, it is unlikely to be a great deal different in 2014. Speaking on Mineweb’s final Gold Weekly podcast for 2013, Head of Research at BullionVault, Adrian Ash says nticipation of monetary policy is going to remain a key driver of prices in 2014.

“You can take a pretty solid view on what gold prices are going to do if you build out a forecast of where you see inflation and where you see interest rates,” he says adding, “the big lesson of 2013 for gold traders and silver investors in the west is that, at the margin, the price is still set by western sentiment; its western monetary policy and anticipation of western monetary policy and yeah inflation here in the developed world which is going to set the tone.”

That does not mean that physical demand for gold is not important, indeed there has been record buying in China and, as Ash points out, India had been on track for record imports before the govenrment clamped down.

According to Ash the current moves in India really cloud the overall demand picture for gold.

“But,” he says, “I do think that its demonstrable in the back half of this year that Diwali has been an absolute non-event for the global gold market. China has clearly stepped into the breach to soak up a lot of the excess metal that was shed particularly from the ETFs in the west, but when you’ve got your number one buyer (and I do think that China probably wouldn’t be the world’s number one buyer for 2013 if India hadn’t gone dark) basically closed out of the global market legally, that is clearly going to have an impact on the undertow for prices.”

The second lesson one gold investors should learn rom 2013, is that physically-backed gold ETFs were not as sticky as a lot of analysts had come to imagine they were.

An element of the significant withdrawal from these instruments, he says was general fatigue with the narrative of financial crisis which has now been ongoing for six years and gold has become a big part of that narrative.

“Equity markets have done phenomenally well this year, particularly the US, and it just makes sense from a portfolio angle to say well of course gold didn’t pay off this year, of course gold was a laggard because as portfolio insurance you wouldn’t expect to pay out at the same time as better yielding assets were doing so strongly.”

Perversely, Ash says, 2013’s poor performance from gold actually proves the success of its insurance properties. That is not to say that all hope of new investment interest is lost, he says, but it is not something that should be counted on as eternal.

He says, “it wouldn’t surprise me at all to see a turnaround in flows depending on broad sentiment towards gold investment.”