Gold traded to a six-month high on Friday, as investors seeking shelter from global concerns surged into the yellow metal. At this point, gold traders will be closely watching the situation in Ukraine, where a referendum in Crimea set for Sunday could determine gold's next move.
"The news in Crimea is really driving this market now," said Mihir Dange, a gold options trader with Grafite Capital. "It's obviously one of the reasons why we've rallied like we have."
The rise in gold was extended on Friday morning, when gold futures rose by about $20 in three hours, hitting a morning high of $1,388 per troy ounce.
(Read more: Gold floats at 6-month highs as Ukraine, China woes fester)
On Sunday, a succession referendum is set to be held in the Ukrainian republic of Crimea. The vote provides a choice between two options. One is joining the Russian Federation, and the other is having greater autonomy from Ukraine as outlined by the 1992 Crimean constitution. There is no third option to maintain the status quo.
The referendum is considered unconstitutional by the interim government in Ukraine. And the leaders of the Group of Seven nations, including the United States, have said that they will not recognize the election results, noting the intimidating presence of Russian troops. But the event could have a big impact on the gold trade regardless.
"If there is some kind of resolution passed, and Russia pulls back and there's a 'Kumbaya' moment, we're going to see gold sell off precipitously. I think there's only about a 10 percent chance of that happening, but as a trader, you have to be prepared for the long shot," said Rich Ilczyszyn of iiTrader.
On the other hand, if violence breaks out, "that could be the other wild card, and in that case, you'll see $1,420 or $1,430 quickly," Ilczyszyn added.
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"There's been a flight to safety," said Brian Stutland of the Stutland Volatility Group. "If you look at the 10-year, the VIX, gold—every tail risk product has been bid for a week now."
But while Stutland predicts that gold is heading to $1,400 due to the recent momentum, he says that traders who are getting in now are "way late to the party."
"Gold probably has a little bit more to go, but it just had a big run, and I think it's tough to jump in here," he said.
Dange's near-term target for gold is $1,401, but he adds that if gold "fails" in late Friday trading, "it's very possible we back off from here."
—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.
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