The recent rebound in gold prices has injected bullishness back in the market, as gold bugs call for further gains in the months ahead, with one analyst expecting bullion to hit $1,600 per ounce by year end.
David Lennox, resources analyst at equity research firm Fat Prophets, told CNBC he's not ruling out another 20 percent upside for gold by December, as the expected robust recovery in the U.S. economy remains elusive.
"We do think that the factors that did push gold towards those record levels are still in the market," Lennox said on CNBC Asia's "Squawk Box." "[U.S. economic] growth is mediocre and... we think that growth is going to stay mediocre for some time."
(Read more: Dennis Gartman: Gold is going 'several hundred dollars higher')
Weakness in the U.S. economy will require the U.S. Federal Reserve to keep its aggressive quantitative easing (QE) program for longer than what the markets are expecting, Lennox said.
"That's going to be good for gold," Lennox said. "All we've got to do is see the speculative end of the market again become convinced that perhaps the Fed is not going to ease QE and they'll pile back in."
Axel Merk, president and chief investment officer at Merk Investments, said the toning down of tapering talk by Federal Reserve chief Ben Bernanke would help drive the price of gold higher after the rout seen earlier this year.
(Read more: Bernanke: Too early to tell when tapering will start)
Last week, Bernanke reassured markets that the U.S. central bank will stay flexible on its timing of the winding down of its $85 billion per month bond buying program, and would only do so when the economy is strong enough.
"Until just a few weeks ago, pundits fell all over themselves to call an end of the gold bull market," Merk said in a note on Tuesday. "As monetary policy appears on a more accommodative path than a couple of weeks ago when "exit" and "taper" talk was all the rage, it's the ugly duckling [gold] that gets to shine."
