After gold futures fell to a five week low on weak Chinese demand this week, analysts told CNBC prices would remain depressed over the coming months.
Gold futures fell 1.1 percent to $1,290.80 an ounce on the Comex division of the New York Mercantile Exchange on Thursday, their lowest level since June 18. Prices nudged up slightly to $1,291.10 in early trade on Friday morning in Asia.
The dip represented a blip in an otherwise broadly positive trend for the precious metal this year, which has rallied around 7 percent year to date.
"There are clear reasons why gold shouldn't be trading higher," Dominic Schnider, Head Commodities & APAC Forex at UBS Wealth Management, told CNBC Asia's "Capital Connection" on Thursday.
Better data out of China – where second quarter growth surprised to the upside at 7.5 percent year on year – and better sentiment in the U.S. mean appetite for safe haven assets like gold should stay relatively muted, Schnider told CNBC.
"Then you have the central banks that tell you 'we'll do whatever it takes' so we shouldn't be surprised that the market is completely numb towards risk," he added.
Schnider also pointed to lower demand from emerging markets as another reason why gold prices should remain low.
On Thursday, the China Gold Association reported a 19 percent drop in gold demand from January to June. Demand for gold bars fell 62 percent during in the first six months of the year, while gold coin demand also fell 42 percent.
"It's most likely we will see lower prices from here," added Ric Spooner, chief market analyst at CMC Markets. "The key driver for that will be a stronger U.S. dollar, caused by relatively good economic performance in the U.S. which I suspect will improve over the next few months."
Other analysts CNBC spoke to, however, said worries over geopolitical risk would gain traction again over the next few months, re-fueling appetite for gold.