After the recent wobble gold was back in the sunshine again as the latest Federal Reserve meeting was deemed about as accommodating for the metal as could be hoped.
Gold rallied more than US$20 in the 24 hours following the meeting, in spite of the Fed sounding a bit more optimistic, as both the dollar and US yields eased.
UBS said gold’s reaction suggested a more hawkish outcome was expected while relative subdued activity in the precious metals space over recent weeks had likely amplified the gains.
The Swiss broker expects a US rate rise in December even with the relatively more upbeat tone from the Fed.
Fed Chair Janet Yellen's speech at the Jackson Hole Conference on 26 August would will provide more clues said the bank.
A clue to the thinking of the investment community came from TD Asset management’s Bruce Cooper.
Speaking to Bloomberg, he said that having turned more bullish on gold at the start of the year, its stance is now “maximum overweight” in the metal across in its portfolios.
Global uncertainty is the reason, something that the Brexit vote and the fast approaching US presidential election are stoking.
“Low interest rates buoy demand for gold” he said and TD’s expectation is for low single-digit returns on fixed income.
"Job one today is about capital preservation," he said. "It’s not about shooting the lights out."
One part of the gold markets that has not matched the strong gains eslewhere so far this year has been physical demand.
The extent of the relative lack of interest from the consumer was highlighted this week by Thomson Reuters GFMS, which reported that physical demand declined by 22% during the second quarter with the two main markets of China and India especially weak.
Jewellery consumption in China fell by 24%, while India saw a 56% drop with only North America seeing any rise in demand.
It underlines how much the gains in the gold price this year so far have been driven by investors and in line with that GFMS upped its forecast for the gold price this year to US$1,279, from US$1,184.
A couple of hours into trading Friday gold was trading at US$1,345, up US$11 on the day, and US$20 on the week.