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Why is the gold price immune to global strife?

Gold has been trapped in a narrow range over $1,300 per ounce, struggling to extend its rally, even as a whole raft of geopolitical tensions remain unresolved.

The yellow metal has failed to "find the vigor usually associated with rising fear," according to analysts, even as U.S. forces carried out air strikes in Iraq, and NATO warned of the "high probability" of a Russian invasion of Ukraine Monday. Indeed, known holdings of gold by exchange-traded funds remaining close to its lowest point this year.

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SeongJoon Cho | Bloomberg | Getty Images

"At their root, long-term rises or falls in the gold price reflect a broader anxiety about politics, the value of money or the outlook for other assets," said head of research at Bullion Vault, Adrian Ash in a note Monday. So why has the gold price not moved in the current storm of geopolitical strife?

Ash said that rather than geopolitics, a third of gold and silver investors think monetary policy will have the biggest effect on precious metal prices in the second half of 2014.

"Gold's famous peak at $850 per ounce in 1980 came when the Soviet Union invaded Afghanistan and also coincided with the Iranian hostage crisis at the US Embassy in Tehran in 1980. But while speculators trading gold futures and options do move the price by raising their betting on breaking news, such moves tend to be brief," he said.

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For now it seems the all-consuming monetary policy story has eclipsed investor geopolitical fears, as many seemingly do not feel the need to currently own "financial insurance".

"When there is civil or world unrest, gold could be seen as an insurance policy to have; and the cost of insurance is of course much higher when you need it," added Ash.

Gold has already gained about 9 percent so far this year, largely on tensions between the West and Russia over Ukraine, and violence in the Middle East.

ETF Securities said geopolitical risk had supported inflows into both gold and oil ETPs (exchange traded products), with total inflows into gold reaching $223 million last week.

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But chief market analyst at Interactive Brokers, Andrew Wilkinson said there has been "scant signs" of incremental demand for the precious metal, despite the turmoil.

"Gold has failed to find the vigor typically associated with rising fear. At around 55-million ounces held by ETF managers in response to trading flows in gold-backed funds, the total remains close to its lowest point of the year," Wilkinson told CNBC via email.

"There is little evidence of accelerated buying as geopolitical tensions take center stage. When holdings of gold were previously this low in 2009, the ETF was trading at around $1,000 per ounce," he said.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave