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Merrick, NY—With the gold bear market recently hitting a succession of three-year lows, the investment community remains divided about whether it’s hit rock bottom or if we might, in fact, see the metal go below $1,000 the ounce.

Last week, Goldman Sachs predicted gold could hit $1,050 by the end of 2014. But that’s not a huge surprise. In April, Przemyslaw Radomski of Sunshine Profits.com told The Centurion that the two thresholds to watch were $1,300 and $1,100. If the $1,300 threshold is broken, he said, it’s quite likely we’ll see $1,100. Gold crashed through $1,300 but hasn’t yet gone below $1,100. Indeed, after a low of about $1,180 last week, by early this week gold had begun to show some modest gains ($1,256 on Wednesday morning).

That’s not to say gold won’t go lower, but part of what’s driving gold down is better economic news in the United States—less fear for investors to flee to safe havens like precious metals—and that certainly is good news at the retail front. Business at the Las Vegas jewelry shows was strong, especially on the high end, and there was a solid vibe of confidence. Personal consumer spending was up in May, suggesting the recent jumps in consumer confidence are translating into real dollars. Though consumer spending for the first half of 2013 may still be soft overall, economists predict spending will rise in the second half of the year as employment growth and economic improvement accelerate.

Frank Holmes of U.S. Global Investors is a commentator for Kitco.com. In his remarks on Monday, he says gold has been “in extremely oversold territory” (i.e., the “B” word) and mathematically due for a reversal toward the mean. But when gold prices plummet, he writes, fear (and/or greed) takes over and some investors forget the fundamental reasons to own gold in the first place: as a portfolio diversifier and a store of value. It is a finite resource with increasing global demand (meaning that long-term it will gain value) but the best way to enjoy its benefits in a healthy manner is like everything else: in moderation. After all, he points out, both Facebook and Apple, two darlings of the stock world, lost more in market capitalization in the last year than gold. Apple, especially, has lost almost five times as much as gold. And gold is entering its annual period of seasonal demand, between Ramadan, which begins this month, Diwali and Indian wedding season in the fall, and Christmas.

Investment markets tend to be a bit bipolar, going too far in one direction or the other. Still, gold has something stocks and bonds don’t: a real cost of production. Stock and bonds don’t have to be physically extracted from the ground like precious metals, and, even at $1,200 gold, many mines will lose money because of increased production costs. So don’t be surprised to see production cutbacks, which, recalling Economics 101, should trigger higher prices for the lowered supplies.

Whatever happens to the gold price, jewelers should focus on positioning gold jewelry as a desirable, fashionable luxury item. The World Gold Council unveiled its new Love Gold campaign at the Couture Show last month, highlighting both hip new designs targeted to Millennials and the advertising and social media programs most likely to appeal to them and drive them to jewelry stores. Watch a video about it here.

Top image: goldalert.com