Thursday's market turmoil pulled gold lower, as speculators liquidated speculative positions, but analysts told CNBC that the longer term flight to safety could now speed up and drive the precious metal towards $2,000 an ounce.
Gold was little changed on Friday morning, following the release of U.S. unemployment data that showed hiring picked up slightly in July and the unemployment rate dipped to 9.1 percent.
Gold recovered some of the $40-an-ounce losses after it fell from record highs Thursday. The commodity had gained almost 13 percent in the previous three months, hitting record highs just shy of $1,685 an ounce.
Dennis Gartman told CNBC on Friday that the status of gold as a safe haven was under threat.
"Gold is not safe. Gold moves $40 to $60 to $80 a day, that's not safe," he said. "The U.S. dollar probably is somewhat safe, but the US dollar securities at the short end of the yield curve is probably the only safe place in the world right now."
Ben Davies, CEO of Hinde Capital told CNBC that Gartman's analysis was "nonsense."
"The dollar isn't the only currency in the world, there are other currencies," he said. "What people are saying now is that they are discarding those other currencies… This is the universal currency."
"Gold is still a safe haven," James Turk, editor of the Free Gold Money Report told CNBC. "What people are fleeing is counterparty risk. Gold is a tangible asset. It's a very attractive asset to own in this period of uncertainty."
Turk noted that "there is a lot of paper trading, and people liquidate the paper because they're over-leveraged. But you can see, gold is back up today, which is I think an indication of its longer term stability and the fact that people do see it as a safe haven."
Ashok Shah, chief investment officer at London and Capital, said that the demand coming out of sovereign buyers, who are emerging as major players in the market as they look to reduce their direct dollar exposure, is outstripping supply, and could push the price significantly higher.
"The really big driver for the gold ultimately is the current account surplus in the sovereign wealth funds, but the problem is the amount of demand that will come from all of these countries is so large compared to the existing total available supply," he said. "In essence, where does the clearing price ultimately equilibrate? I think that's very hard to say."
"What we have had in the last three months, and probably longer, has been a continued flight to safety, gold being one of the beneficiaries," he added.
"Are we going to enter another long run flight to safety? In other words, is there going to be an acceleration in the flight to safety? If that is the case, effectively the authorities will have to respond with some kind of quantitative easing."
At Castlestone Asset Management, CEO Angus Murray said that this ultimately could push prices north to $2,000 an ounce.
"The issues of Europe will not be solved for a number of years, nor will those of the United States. Gold will continue to be added to portfolios for this reason and the prices are likely to continue to appreciate towards $2,000 over the course of this year. One of the only assets that investors feel comfortable owning today is gold. That’s an amazing statement in itself," he told CNBC.com.
Davies agreed. "We've moved into new price territory in nominal terms. At this point, the buyers, which are primarily out of Asia and the sovereign wealth funds in particular…they are stepping up their buying as they see the issues in the world, but there is no willing seller so we are going to drive prices up," he said.
"Because we are in new territory I think we can move exponentially up to the $2,000 level."