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LONDON (Reuters) - Will Chinese buyers ride to the rescue? Will the super-rich decide painting and sculpture is a better investment than volatile stocks or risky debt?
Those are the big questions on the art world's lips as hundreds of galleries and collectors descend on London for the annual post-war and contemporary frenzy centered around the October 13-16 Frieze Art Fair in Regent's Park.
The annual event held in a giant marquee has quickly become a key date for anyone wanting to acquire top works by modern and living painters.
It has spawned a merry-go-round of auctions, rival fairs like the Pavilion of Art & Design (PAD), major exhibitions, gallery openings including a new White Cube space and, of course, endless glitzy, champagne-fueled parties.
But after two years of strong growth in prices, particularly for top artists, global financial turmoil once again threatens to bring the chill of uncertainty to the week as it did in the wake of the 2008 Lehman Brothers collapse.
Matthew Slotover, co-founder of Frieze who is considered one of the art world's most powerful figures, conceded that concerns over slow economic growth and Europe's debt crisis could weigh on the fair.
But he, like many others, argued that investors may prefer to put their money into a painting than a paper asset.
"It is something tangible and real," he told Reuters in a recent interview, stressing that personally he would not treat art as a financial investment alone.
"In an age where people are losing faith in paper money, in currencies and in equities, it's one of those assets that people feel, well, at least I've got this actual thing."
More and more frequently experts draw a distinction between the top end of the market -- works by household names that rarely come to market -- and mid-range art priced, say, between $100,000 and $500,000.
Anders Petterson, head of ArtTactic which tracks investor confidence in different sectors of the art market, saw his mid-range indicator slump from nearly 90 percent in June to less than 30 percent in October.
Over the same period the indicator for works valued at $1 million or above slipped slightly but remained over 90 percent.
Anthony McNerney, head of contemporary art at Bonhams, summed up the mood among the auction houses.
"It seems that rich people quite often will always stay rich," he told Reuters.
"Obviously there is a lot of nervousness that it (market contraction) will happen again as it did three years ago. I think we've got to carry on as best we can, and if you've got great quality fresh to the market, it really doesn't matter."
The focus on the very best art with strong provenance has seen a narrowing in the art that owners are prepared to sell, with the likes of Andy Warhol, Roy Lichtenstein and Francis Bacon taking up a larger share of auctions.
One "wild card" this week could be demand from Asia's growing number of ultra-wealthy collectors.
A few years ago it was Russian oligarchs who were snapping up much of the world's most expensive art. Now the focus is firmly on China as the land of the "modern-day Medicis."
Recent sales at Sotheby's in Hong Kong gave a mixed picture of Chinese demand for art and luxury goods.
The auctions raised $411 million in spite of difficult conditions on financial markets, yet the total was down from April and of the works on sale, contemporary art struggled most with more than a fifth of lots unsold.
Petterson wrote recently that the kind of "fashionable, cutting-edge contemporary art" typically on show at Frieze could be vulnerable to another downturn.
"Even the top end of the art market might not be quite as safe as investors would like to think if the economic crisis escalates further," he said.
"As research from the last crisis shows, when investor confidence evaporates, all assets start to correlate, something many art market insiders like to forget."
Auction houses will offer works valued at over 100 million pounds ($160 million) this week, and the art displayed at Frieze is estimated by insurer Hiscox to be worth $350 million compared with $375 million last year.
The top lot could be Gerhard Richter's "Candle," estimated by Christie's at 6-9 million pounds, a figure the German artist said last week was "impossible to understand" and "daft."
In fact, talking about art in the same breath as its commercial value is often frowned upon in a world where polite conversation focuses on a painting's aesthetic appeal and meaning and not its price.
But as one video installation featured in this year's Frieze Art Fair catalog states bluntly: "The ART WORLD is dependant (sic) on commerce for its existence."
Reporting by Mike Collett-White, editing by Paul Casciato