Gold is likely to hit $1,650 an ounce by the end of the year and could even hit $1,700, according to one analyst.
"The continuing sovereign debt crisis in Europe, and in the U.S. there is the possibility of further stimulus, so all this generates an environment that is positive for gold," Ong Yi Ling, investment analyst at Phillip Futures told CNBC Monday.
Spot gold has had its longest winning streak in four decades, and it surged above $1,600 an ounce earlier Monday, rising for the second consecutive week as weak confidence in the global economic environment saw investors seek security.
Ong told CNBC that silver could benefit from the rally in gold prices, despite many investors piling into the metal, only to see prices plummet back in May.
"A lot of investors got their fingers burnt when there was the huge fall in silver prices," Ong said. "Investors are understandably cautious and time is needed for them to come back to the market, but with gold prices traded near record highs investors will look towards an alternative and perhaps silver could be the natural choice."
Traditionally, the summer months tend to be a lull for gold as the monsoon season grips India—the largest consumer market for the precious metal—as a halt to weddings and festivals leads to weaker demand.
Ong advised any investors keen to hold gold to assess their risk profile before investing.
"Which instrument you choose, whether it's an ETFor spot gold, really depends on your risk profile, if you want short-term fluctuations in gold prices and to play on that then perhaps spot gold or futures would be best but if you want to be longer-term player, an ETF could be a possible choice," she added.