It’s not just investors who have been buying up gold.
Last year, central banks added hundreds of tons of bullion to their reserves, according to the World Gold Council.
“There’s a very clear shift away from the US dollar, which is benefiting gold immensely,” said Kavalis.
The start of this year has seen gold continue to rally but Frappell warns the “news-driven” market could also result in a fall in its price.
“There’s got to be scope for unexpected news that actually might be positive for the world and not necessarily positive for gold,” he said.
But not everybody is buying gold for purely investment reasons.
In many cultures, the metal is purchased during festivals or given as gifts at celebrations such as weddings.
In India, the annual Diwali festival is believed to be an auspicious occasion to buy precious metals in order to bring on wealth and luck.
According to the US investment bank Morgan Stanley, Indian households held $3.8tn of gold, equivalent to 88.8% of the country’s gross domestic product (GDP).
Neighbouring China is the world’s largest single consumer market for gold, with many believing that buying it brings good fortune.
“We often see a seasonal uptick in demand around Chinese New Year, which we are seeing at the moment to an extent,” said Kavalis, referencing the upcoming Year of the Horse, which begins in February.