News of high-profile investors like billionaire John Paulson dramatically exiting positions in gold is positive for bullion as it implies that the worst of institutional selling could be over, analysts tell CNBC.
"The reason for the big drop in gold (in recent months) primarily was large scale selling out of exchange traded funds by big investors. I think those big ETF outflows have finished for the moment. They got it right, they acted early," Ric Spooner, chief market analyst for CMC Markets, told CNBC.
"Without that (ETF selling), we could see a rally until we get a high enough price for them to come back in as sellers," he said.
Spooner sees further upside for gold, which hit a two-month high of $1,372 an ounce on Thursday. He is calling for the precious metal to trade in a range of $1420-1490 an ounce in the coming weeks.
"People who needed to get out of gold to balance positions, have likely done so. From here on, you tend to have more opportunistic sellers who want to lighten their portfolios or lock in profits from recent gains," he said.