Gold bulls push back in wake of US debt figures

According to CNBC's latest poll of traders, analysts and strategists, gold is set to rise in price over the course of the week. 52 per cent expect gold to rise this week with 39 per cent expecting a decline. Just nine per cent believe gold will trade around current levels.

IG Markets' positioning data of clients with open positions shows that 67 per cent expect gold to rise in price while 33 per cent expect a decline.

Gold rallied three per cent last week as US lawmakers reached a temporary agreement to raise the debt-ceiling. We've seen a similar post-ceiling rally before. In 2011 gold saw a 17 per cent rally in the 15 days following the raising of the debt-ceiling.

Analysts and traders may be more optimistic about short term price rises, however the conventional wisdom has become increasingly firm, that gold is set to continue declining. The price of gold has been slashed by 22 per cent this year and is set to experience its first annual decline in 13 years.

Goldman Sachs, Credit Suisse and JP Morgan have recently estimated that gold will continue to decline in 2014.

The sustainability of US debt and the questionable integrity of the dollar has led some to see gold as a safeguard for the long term despite recent losses. On Friday The US treasury posted that the country's national debt now stands at over $17 trillion and as yet the Federal Reserve has not begun tapering its massive bond buying programme.

Tepid growth, loose monetary policy and unreformed entitlement programmes lead some gold bulls to see the position of the precious metal as more trustworthy than either the US government or the Federal Reserve.