NEW YORK (TheStreet) -- The precious metals rumor mill is in high gear once again. The contradictions are almost tantalizing.The pantheon of gold gurus has a lot to say about this alluring symbol of wealth. On Friday the 13th (just that date alone can make some skittish) Goldman Sachs' ( GS) head of commodities research Jeffrey Currie said in a TV interview that gold is about ready to dip further as the U.S. Federal Reserve withdraws stimulus and economic data improve. The investment bank suggests there's risk gold bullion may even fall below $1,000 an ounce. Does Currie know something we don't, or is he a part of the 66% of analysts who believe the Fed will start taking its foot off the bond-buying pedal sooner than later? The debt-ceiling, the Syrian drama and other tempests in a teapot may support gold prices in the short term, Currie said in the interview, but he strongly suggested gold will resume its decline into next year. He went on to say the firm's price target on gold for 2014 is $1,050, and during the ensuing correction the commodity may overshoot to the downside. "While we agree with the mid-cycle price somewhere around $1,200, we believe that at least near term it can overshoot to the downside, which is why we have $1,050" as a target, Currie said. "It clearly could trade below $1,000." Peter Krauth at Money Morning, they may beg to differ. Krauth wrote on Monday that "gold is set to surge." He claims one of the best indicators of the direction of gold's price is the Commodity Futures Trading Commission's Commitment of Traders (COT) report for gold. His premise suggests that the commodity traders tend to move in tandem and that these speculators "...are almost always wrong at extremes." "According to recent COT reports, speculators are so bearish on the gold price, their short positions are 70% higher than they have ever been throughout this 12-year secular gold bull market," Krauth explained.
The View from a Contrary PerspectiveThere are only two things that get less respect than gold. Junk food and gold stocks are not high on any investor's food chain at the moment, and I'm not sure junk food isn't more venerated. ABX). Shares of Barrick closed on Monday at $18.14, in spite of an analysis published by Two Fish Management valuing the company's stock above $44 a share. Barrick estimates its gold production this year will be 7.2 million ounces, over two million more ounces than the next biggest miner, Newmont Mining ( NEM). There are a number of chinks in its armor. Its net debt is around $13 billion versus Newmont's $5 billion. Plus, Barrick has earned a sour reputation for its capital expenditures and shaky leadership. Let's take a look at both of these two famous gold producers, starting with a 1-year chart of ABX. The chart also includes its trailing twelve month (TTM) EBITDA earnings. ABX data by YCharts
Barrick's earnings and sales growth depends on the price of gold staying afloat. In a recent interview CEO Jamie Sokalsky proclaimed, "This company has a more disciplined capital-allocation framework and is focused on cost control, portfolio optimization return on investment and free cash flow."
Many wonder if the gold miners can rejuvenate confidence among disenchanted investors. If Goldman Sach is correct about the direction of the price of the golden metal, that may be the final nail in the coffin. If you decide to begin accumulating shares of ABX or NEM, it would be important to have a disciplined exit strategy that you can count on if shares head the wrong direction. Follow @m8a2r1 This article was written by an independent contributor, separate from TheStreet's regular news coverage.