The gold price is taking a breather today after yesterday’s gains on the uncertainty of the upcoming UK elections, but according to one analyst a new all-time high could be in the making.
At 3.54pm (GMT) gold was trading at $1,279 down from $1,289 in yesterday’s trading.
Most see today’s pullback in the precious metal as temporary with a floor around $1,270, and with French elections approaching and political tension between the US and North Korea growing by the day, the is every reason gold will quickly rebound.
"The whole situation for gold is more than optimistic because of the geopolitical tensions aroused by North Korea and with the interest rate hike expectations coming down," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
"We see $1,280 as the gravity around which the trading range will be built and prices will move between $1,270-$1,310," he added.
One analyst has predicted that gold could hit an all-time high over the next 1.5 years and he says that the rise may not be a smooth ride, but is entirely possible as hopes of more rate rises from the US Federal Reserve fades and investors seek out other assets besides the US dollar.
“From a fundamental point of view, I think we're going to get a break out on the upside,” noted Juerg Kiener, managing director and chief investment officer of Swiss Asia Capital.
“The markets don't always move (too well) in the short term, but I think in the medium term it does," he said, pointing to gold's strong historical performance. "I think this trend will continue until we start seeing again stability coming into the financial system and government behavior," he added.