After a nasty slide in 2013, gold has found its feet again, gaining almost 10% this year to around $1,340 an ounce. Some investors have sought shelter from emerging-market turmoil in the metal, while fears that the weather might not be solely responsible for the weak recent run of data in America have also helped.
What's more, the Bank of England and the US Federal Reserve have both made it clear that interest rates will stay low for a long time, which has reawakened fears that "central banks will stay too easy for too long", says John Authers in the FT.
Central banks mis-steps, and other reasons to fear that inflation could make a comeback in the next few years, mean that investors should keep around 5%-10% of their portfolio in gold as an insurance policy. But for now, the upside looks limited.
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On the plus side, many gold mines become unprofitable at around $1,200, implying that supply will begin to shrink and bolster prices. Growing emerging-market demand for gold for jewellery and investment also helps establish a floor for the price.
But rising US real interest rates "will remain a powerful headwind against gold", says Capital Economics. As the US and the global economy recover, the US central bank is set to wind down its money-printing programme and eventually raise interest rates.
Higher real interest rates are always bad for gold as it yields nothing and so becomes less appealing compared to interest-bearing assets.
Gold can climb a bit further in the short term (Capital Economics sees scope for a rise to $1,450 by the end of the year), but if there is another surge to record levels as inflation returns, it will be a few years away.
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