Top Three Places for Bears and Bulls to Invest in GoldAfter a decade of consecutive gains, it looks like gold’s reign as the precious metal darling could be in jeopardy. Between early 2002 and September 2011, the price of gold soared over 590% to an all-time high of $1,923.70. Since then, gold has lost some of its luster, down almost 18% since the beginning of the year and more than 28% since the record-highs posted in September 2011.

During the first quarter of 2013, demand for gold slipped 13% year-over-year. On the paper front, investors sold 177 tonnes of gold (or six percent of global demand) through exchange-traded funds (ETFs) worth approximately $9.3 billion. (Source: “Global demand for gold jewellery up 12% in Q1 2013 driven by significant increases in India and China,” World Gold Council web site, May 16, 2013.)

But it wasn’t all bad news. Total jewelry demand was up 12% year-over-year. China led the way, up 19% at a record 185 tonnes. Demand in the Middle East and India was up 15%, respectively, and demand in the U.S. increased for the first time since 2005, climbing six percent.

Sales of gold bars and coins were also up in the first quarter. Sales increased 22% in China and 52% in India; in the U.S., sales jumped 43%. Central banks continued to increase their holdings, purchasing in excess of 100 tonnes for the seventh consecutive quarter.

ETFs may be liquidating their holdings, but the average person on the street isn’t—and neither are central banks. Even though sales of bars and coins, jewelry, and the technology sector make up about 80% of the market, the total demand for gold each quarter is only about 1,000 tonnes—meaning it wouldn’t take much for gold-focused ETFs to impact the price of gold on paper.

Currently trading near $1,375 an ounce, gold may have lost its shine on paper; but when it comes to physical gold, there’s actually a shortage. With individual gold stocks doing so poorly and physical gold doing so well, where should investors turn?

Depending on your mood, there’s justification for being a bear or a bull.

Sure, stocks are hitting all-time highs, but that might have more to do with the Federal Reserve’s $85.0-billion-per-month quantitative easing policies and artificially low interest rates. Take the Federal Reserve out of the picture, and we could focus on the fact that unemployment and personal debt remain high. The U.S. national debt is almost at $17.0 trillion—and it will probably never get paid off.

Until the underlying factors that led to the Great Recession are dealt with, gold will continue to be an attractive place for risk-adverse investors, regardless of where it’s trading at on paper.

If you’re a gold bull, you could consider ETFs like Market Vectors Gold Miners ETF (NYSEArca/GDX) or Market Vectors Junior Gold Miners ETF (NYSEArca/GDXJ). With individual gold stocks taking a beating, there are a number of great options for those anticipating a rebound, including Goldcorp Inc. (NYSE/GG) and Barrick Gold Corporation (NYSE/ABX).

Gold bears, on the other hand, maintain the yellow metal will continue to slip on an improving economy, a strong U.S. dollar, investor apathy, and inflation. For those investors, it might make sense to find an ETF that shorts gold, like the PowerShares DB Gold Double Short ETN (NYSEArca/DZZ) or the VelocityShares 3x Inverse Gold ETN (NYSEArca/DGLD).

Some investors will be content waiting to see where gold goes. For others, there are still plenty of excellent opportunities for gold speculators, whether the precious metal is going up or down.