Gold has made a comeback over the last week hovering on the brink of $1,300 an ounce supported by dovish comments by Federal Reserve Chairman Ben Bernanke and a sharp decline in the U.S. dollar.
Does the recent rally in the precious metal - that has gained almost 6 percent over the past week - signal that tapering is further off than initially anticipated?
"The price action in gold led the expectations of U.S. tapering. Gold broke down below important levels many weeks before U.S. yields started to rise and the taper talk became widespread," said Dhiren Sarin, chief technical strategist at Barclays.
"The fact that gold is now rebounding is a suggestion that some expectations of tapering are fading away," Sarin said, adding that the close last week on Friday was an encouraging sign that gold is gaining some momentum.
An improving U.S. economy has led to expectations that the central bank would begin scaling back its bond buying program as early as September or December.
But Bernanke's dovish remarks last week that the U.S. economy continues to need highly accommodative monetary policy for the foreseeable future have called these forecasts into question.
"Bernanke's comments on July 10, in my mind, suggest that tapering is on hold. The stimulus is out there for longer," said Jonathan Barratt, founder of Barratt's Bulletin, noting that he expects tapering to begin in the first quarter of 2014.
"Hedge funds are becoming more long gold, they are starting to come back to the market. All of a sudden, people are saying if Ben's going to keep stimulus up, perhaps we have more concerns," he added.
Hedge funds increased their net long position in gold by 4.1 percent to 35,691 futures and options contracts, U.S. Commodity Futures Trading Commission data for the week to July 9 showed. In addition, since July 9, gold exchange traded fund (ETF) outflows have almost come to a stop, according to UBS.