According to experts at UBS, gold is trading above its 200-day moving average and pent-up demand in China may prove beneficial.
"We think that the recent price correction and sizeable decline in positioning improves the risk-reward for gold, allowing those who are looking to build longer-term gold exposures to build positions at better levels," said Joni Teves, a UBS strategist, in a research note.
"Given cross-currents of factors and risks, we think there is room for investors to be patient in terms of timing the rebuilding of gold positions from here."
The main reason for gold's recent slip is the rising strength of the dollar, as well as strong yields on U.S. bonds.
But several factors are set to boost gold prices into the end of the year.
"With India as one of the world's largest gold consumers approaching the festive season, we are optimistic that a surge in demand will push the market prices internationally," said chief executive and Founder of Sun Global Investments, Mihir Kapadia, in a press release.
"Other international factors we are taking into consideration include the US Presidential elections and the Fed interest rates where Gold and the dollar can rally."
On the other hand, some remain bearish about the prospects of gold.
"In the longer term, prices are on a gradual downtrend reflecting the fading of safe-haven demand on the back of slowly receding growth risks and contained inflationary pressures. In the short term, prices fluctuate with the US dollar and shifting expectations about the next interest-rate hike," warned Norbert Rücker, head of commodities research at Julius Baer, in a note.
"The lack of safe-haven buying, the risk of profit taking on futures markets and the outlook for a stronger U.S. dollar suggest further pressure on gold and we thus maintain a cautious view."
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