Gold prices climbed to a two-and-a-half week high of $1,608.30 an ounce on Monday as the controversial bailout plan for Cyprus, which threatens renewed uncertainty in the euro zone, led to buying of the safe-haven metal.
However, doubts remain over whether the bounce in the precious metal that has fallen out of favor with investors this year, down 4 percent since the start of 2013, can be sustained.
According to Warren Gilman, chairman and CEO of investment firm CEF Holdings, a long-term gold bull, this does not mark a turning point for the safe haven asset.
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"I don't think the gold trade will come back. This is a short-term run. By the end of this week we'll sell off again," he said, noting that the worries over the Cyprus bailout deal will pass, and risk appetite will return given the brightening outlook for the U.S. economy.
Ric Spooner, chief market analyst at CMC Markets Asia Pacific agrees, noting that the upside in gold is not yet "conclusive."
"The markets had an initial reaction, but they will take a wait and see attitude to see how significant the response is from European investors tonight and how this plays out over the next few days," he said.
Traders have become used to waiting for situations to evolve before acting, he added.