Bernard Dahdah, Precious Metals Analyst at Natixis, on gold and its drivers

The unseasonably cold weather in the U.S. over the winter months has led to poor economic figures, which in turn have pushed interest rates lower and weakened the Dollar. These two factors are the most important reasons why gold prices have pushed higher. 

There have also been specific factors that have helped to boost the allure of gold as a safe-haven. Tensions between Ukraine and Russia have lifted the price of gold. A small, but growing number of Chinese corporate defaults may stimulate higher demand for gold in China, the world's biggest bullion consumer. India may reduce the import tariff applied to gold ahead of the upcoming election in May. Prior to the imposition of import tariffs, India was the largest market for gold.

We do expect better economic data coming from the U.S., which will still be the main factor influencing the price of gold in the year to come. As US economic fundamentals perform so, gold prices will be susceptible to a further relapse.

Yes, events in Ukraine have helped to boost demand for gold as a safe-haven, but we would expect this to be a relatively short-lived influence. More important is the US economic outlook. Were it to become clear that economic data were improving as we move through Q2, higher bond yields and a stronger dollar are likely to prove more significant for gold prices than some of the short-term factors currently supporting gold prices.

We forecast average gold prices of $ 1,230/oz in 2014, with prices expected to be around this level at the end of the year.