Even devoted gold bugs seem to have been taken by surprise by the metal’s stellar performance this year.
UBS said many market participants have been caught on the wrong foot, not only in gold but in other markets as well.
That gold's correlations with the US dollar and equities have remained broadly intact reassures investors.
“Gold is outperforming against other asset classes and even relative to other safe havens and people are starting to give gold the credit we think it deserves.”
After adding most than US$80 per ounce since last Friday, gold has now climbed around 17% since the start of the year.
Scotia Bank said during the week gold broke through two key chart points at US$1,207 and US$1,245.
And it now sees a high for the year of US$1,305, adding only a “close below US$1,200 would dampen our bullish outlook”.
Non-chartists, too, seem more upbeat than for some time.
Thursday’s rise of US$67 at one point was its largest daily gain for more than a year and the buying came from all quarters said David Govett, head of Precious Metals at Marex Spectron.
Bank fears, US Fed chair Janet Yellen’s hint that negative interest rates were a possibility and tumbling Asian market sparked the buying.
Exchange traded funds made up the bulk of it, Govett said, but all types of investors were involved and gold was a major recipient of all the money sloshing around the system looking for a home.
“Gold has now rallied $200 from the first day of January, way beyond anyone’s expectations and as it has moved higher has steadily attracted more and more money.“
Govett adds that gold is a relatively small market compared to the stock market, bonds and currencies and it only needs a tiny percentage of that investment money to move into gold to send the price soaring.
Physical demand may also have played a part.
Latest data from the World Gold Council showed demand was also rising towards the end of 2015.
Fourth quarter demand grew by 4% year-on-year to 1,117.7 tons, a two-year high.
Over the year, gold demand totalled 4,212 tons, a fourth year of decline, but the pick up in the final quarter clawed back some of weakness seen earlier.
The World Gold Council believes that the demand outlook in China and India, the largest markets last year, is better this year.
Spot gold was trading at US$1,239, down US$7, on Friday a gain of US$85 or more than 7% on the week.