In the near term, analysts have said gold is an obvious play as stocks around the world have had a challenging week, with the Nikkei suffering its worst week since Fukushima and U.S. and European technology stocks seeing heavy declines. Spot gold traded close $1,319 after three days of gains, peaking at $1,324 on Thursday.
"Investors are becoming more defensive, we have seen equities come off and that is where the value of gold really shines for investors," said Martin Arnold, director and research analyst at ETF Securities.
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But Arnold added that market volatility would ultimately not be enough to drive the price of the metal consistently higher – and this is down to Asia's weak demand.
"We saw last year that the strong physical demand came in when the gold price slumped, but in the current lack of strong investor demand, you can't expect very strong price gains. We expect a modest move higher this year – but see better opportunities in the commodity space, particularity with other precious metals with more industrial application," he told CNBC.
At its peak in September 2011, gold topped $1,900. Investors who had hung on to the metal in the decade up to its all-time high would have seen a sevenfold increase in its price, or gains of 575 percent.
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Beat Wittmann, CEO of TCMG Asset Management said the metal has been treated as "nothing more than a hedge in the last two years," but as interest rates are relatively low at the moment, the opportunity cost of gold is not too inhibitive for investors.
"There are people that don't want to be in credit or equities for structural reasons, gold then is a valid asset class. As long as we are in a very low interest rate environment, the alternatives are not very attractive, so the opportunity cost to hold for a lot of people is still OK," he said.
The $1 trillion crash
The collapse of the gold price in April 2013, which saw the yellow metal sink below the key psychological level of $1,500 an ounce, was what Adrian Ash, head of research at BullionVault describes as the "$1 trillion dollar crash".
"Gold lost one-tenth of its market value on Monday 15 April alone. That wiped the equivalent value of London's entire housing stock off the world's above-ground gold holdings," he said.
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"Investors buying gold and gold derivatives because they expected gold to rise for 13th year running naturally took fright. But Investors still without it might ask what they're missing in the bigger picture now gold's rallied 10 percent already in 2014," he said.