Spot market gold has risen from $US1564 to $US1781 in recent weeks, a 13.8% gain, while yesterday it traded up slightly by 0.3%, starting the day around $US1736.
However, for New Zealand investors the weakening US dollar and strengthening New Zealand dollar are eroding gains on the rising price.
Sentiment for gold at the end of January compared starkly with late December, when prices dropped by more than 10% in their biggest monthly fall, since the collapse of Lehman Brothers in an investor "dash for cash", Reuters reported yesterday.
A $US400 price drop from last September's record $US1920.30 had left investors questioning whether gold had ended an 11-year rally.
Forsyth Barr broker Suzanne Kinnaird said fundamental drivers for the first half of 2012 pointed to a firm gold demand, despite the absence of seasonal demand from India.
"The gold price has recovered from the lows at the end of 2011, with prices snapping back. Gold has reached levels consistent with its long-term upward path since late 2008," Ms Kinnaird said.
Craigs Investment Partners broker Peter McIntyre said several factors had aligned to boost gold's gains, including a weakened US dollar, some buying support from Asian investors and it having been "over-sold", when it slid below $US1600 several weeks ago.
"We expect gold prices will recover given negative real interest rates, central bank diversification, a resumption in US dollar weakness and the ongoing risks to the European financial system," he said.
While the price appreciation beyond 10% looked attractive, the kiwi exchange rate with the greenback had during that period risen by about 6%, from US77.85c to US82.57.
"The price levels look good in US dollar terms, but turn quite sickly when seen in New Zealand dollar terms," he said.
Global uncertainty was also making equities investment less attractive and with US Treasury bonds offering "dismal" interest rates, more investors were turning to gold, he said.
Ms Kinnaird said the technical view was that the upward trend in gold "should remain intact", and Forsyth Barr was targeting a price move above $US2000 an oz during 2012, with Mr McIntyre similarly predicting a rise to $US2000 during July to September, before weakening off in the fourth quarter.
Ms Kinnaird said the three-month gold forecast stood at $US1800 and the 12-month forecast at $US2200, while Mr McIntyre estimated the gold average for calendar 2012 would be $US1825 and for 2013 at an average of $US2000.
Ms Kinnaird said the European Central Bank's balance sheet was expanding fast to counter-balance the deleveraging process of Europe's banking systemShe expected the Indian rupee to recover and the Chinese renminbi to continue its gradual appreciation against the US dollar.
"Our outlook for Europe should play in favour of gold," she said.
The euro had risen against the US dollar on hopes for a Greek debt restructuring deal that would help the country avoid a disorderly default, possibly setting itself up for a test of a key chart level, Reuters reported.
While recovering global share prices and hopes of a deal for Greece tempered gold's safe-haven gloss on Tuesday, concerns that Portugal could follow a similar path to Greece, and data pointing to a poor first quarter in the euro zone, was supportive.
More broadly, bullion was benefitting from a favourable monetary policy backdrop, with a jump of almost 5% last week after the US Federal Reserve pledged to keep interest rates near zero until at least late 2014.
