Analysts say there are a host of reasons investors are loading up on gold, and at some point later this year, the U.S. presidential election could be seen as one of them.
"I think that the you've got 'Brexit' coming at you. You have a Spanish election coming at you in a week and a half and that is terribly confusing. It looks like the left is going to win. You have rising nationalism in France. You have the strike in France. You have one thing after another," said Dennis Gartman, publisher of The Gartman letter. Other worries include rising tensions with China in the South China Sea, and Nigeria where militants have shut down oil production.
Gold has also moved higher as the dollar pulled back, a phenomena helping other commodities. The greenback has weakened as the Fed's forecast for rate hikes was rolled back to two this year from four. The metal got a lift after last week's surprisingly weak May U.S. jobs report cast doubts on whether the central bank can raise rates at all this year.
"I think the key element more than any one geopolitical issue, even as much as the Fed holding off a spate of rate rises, is some economies moving into negative rates. That has been very good for gold. When you look at when the gold rally began it is very close to the issue of bonds with a negative yield," said Steel. "If you look at all the economies that have a negative yield, they add up to a little over 27 percent of the world's GDP. ... Negative yields are a powerful cocktail for gold. They eliminate the opportunity cost of owning gold."
Steel said the move into the metal has been steady, not an excited gold rush spiking prices. "Basically, the rally has been entirely investment led," he said. That is opposed to a rally driven by physical demand, with buyers in the biggest markets — India and China — now less active.
"It's kind of like having a table with a leg missing. It's heavily investment led. I'd feel better with a longer-term rally if we had a physical component. It does present upside roadblocks further up," he said.
One major catalyst for the rush into gold is the June 23 U.K. vote on whether to leave the European Union. Gartman said the move in gold is clearly tied to the referendum, as the euro is weakening against the safe haven Swiss franc, as well.
"The fact here is just a vote on Brexit, whether it succeeds or not, is not a good sign for the European Union," said Jim Wyckoff, senior analyst at Kitco. He said Brexit is not expected to succeed, but if it did the fear is that the EU itself could begin to unravel.
"If the euro is going to go away you're seeing people buy gold with euros as a safe haven play," he said.
"If Brexit passes, what's the next step? ...The U.K. pulls away from the European Union. Are some of the periphery countries going to pull out? ... That leads to the thought of what happens to the euro. Some people are going to take their euros and buy gold because buying gold today is there for down the road if the euro is no more," he said. "That's not mainstream but it's something people are thinking about."
Wyckoff said if gold breaks the $1,275 per ounce level, he next target is $1,308, its high for the year. That is a level that would bring in new buying and drive the yellow metal higher.
Steel said ETFs have been big buyers of gold this year. Year to date, all-ETF investment has risen by 12 million ounces, and now hold 52 million ounces. The SPDR Gold Trust ETF GLD is the largest.