After hitting a record high of US$1,923 an ounce in September 2011 -- a spectacular increase of over 600% on the decade-long bull market -- the precious metal's value almost halved to $1,061 at the end of last year on the United States' looming first rate rise in almost a decade.
The interest rate bump would push up the value of the US dollar, with which gold typically has an inverse relationship.
But after a four-year slide, gold has regained its glitter, becoming this year's best-performing asset class with a rise of more than 10%.
Gold prices also posted their biggest quarterly rise in nearly 30 years in the three months to March after regaining their safe haven status, given the heightening risks over geopolitical tensions, terrorism and the fragile state of the global economic rebound, a wild swing in capital markets, the US Federal Reserve (Fed)'s dovish stance on interest rate increases and soft oil prices.
Fears over weak growth in major economies, from the euro zone and Japan to China and the US, are whittling down investors' appetite for risk. The Asian Development Bank recently said China, dubbed the factory of the world, would see smaller expansions of 6.5% this year and 6.3% in 2017, down from 6.9% last year, following rebalancing efforts to move the world's second largest economy towards a far more sustainable economic growth model.
Unconventional monetary policies through negative interest rate regimes and hefty bond purchases adopted by the Bank of Japan and its counterpart in the euro zone makes gold more appealing. Reduced prospects for a forthcoming US interest rate rise because of the fragile state of the global economy also add lustre to gold.
In comparison, this year the benchmark SET Index and bonds have yielded returns of 9% and 2-3%, respectively.
The question at the moment is: Will the gold rally last?
Veteran gold traders, analysts and international banks have differing views on the issue. Even those who are in the bullish camp, however, predict that the upside is capped.
HSBC, for example, is mildly bullish over the precious metal. It forecast that gold prices will average $1,205 per ounce in 2016, $1,300 in 2017 and $1,325 in the long term.
"We see a broad gold price range of $1,025-1,275 an ounce for 2016," it said in its study, "Say farewell to five-year lows in 2016".
Strong demand from emerging markets, an end to sell-offs in gold exchange-traded funds (ETFs), gold hoarding by central banks and tight supply are giving a boost to gold prices, HSBC said.
"Demand has already set a floor for gold prices, and we think buying from India and China is likely to increase in 2016. EM [Emerging Market] buyers and sellers are highly price sensitive: prices below $1,100 per ounce attract buyers, but they shy away from purchases when gold is near $1,300," it said.
Many ETF holders have adopted buy-and-hold strategies that should keep the bulk of remaining holdings largely intact. At the same time, short positions are relatively high and hold out the possibility of a short covering rally in gold.
A recovery in ETF holdings and net long positions closer to historical levels should steer the market on a positive course for 2016, HSBC said.
Central banks have become an important source of gold demand in the past three years as reserve managers in emerging market central banks diversify their foreign exchange reserves away from the US dollar, said HSBC. Such a trend is expected to continue this year, it said.
HSBC predicts that central banks will expand their gold reserves by 450 tonnes this year, down from 500 tonnes last year.
"While we expect 2016 purchases to be down on 2015 levels, they will still be historically high and hence price supportive," it said.
Boonlert Siripanich, chief executive at Ausiris Co, says gold has thus far been the biggest gainer this year as the precious metal always performs well amid global woes.
A spate of downbeat economic data and massive money printing by the European Central Bank and BoJ are signals that it could take time for the world economy to start heading towards a recovery.
The Fed's dovish stance has also reversed the stronger US dollar's trend, which comes as a boon to gold prices.
Stockpiling of gold by central banks and gold SPDR, the largest physically backed gold ETF, have been other factors pushing up prices for the precious metal.
SPDR has increased gold investment by around 28% from the beginning of this year.
"Central banks and SPDR are real investors, not speculative ones. They have bought physical gold and kept it, and they don't trade paper gold," says Mr Boonlert, adding that their purchases have tightened gold supply.
The upside in gold prices, however, have been capped following the recent rally, he adds.
Jitti Tangsitpakdi, president of the Gold Traders Association, agrees with Mr Boonlert that it is still possible for gold to run up further, but the upside is capped because of the Fed's rate rise prospects.
"I, personally, think that the gold price will reach $1,275 an ounce in 2016 or even $1,300 if it can break through the strong resistance at $1,275," says Mr Jitti.
Apisit Patrasakolkiat, an analyst at Gold Research Center, says gold has become a safe haven that investors want to cling to again this year due to the global economic slowdown, sinking commodity prices and the greenback's weakness.
He is still uncertain as to whether the gold rally will continue as both negative factors -- US rate increases, for example -- and positive factors -- relative weakness in the euro zone economy and geopolitical tensions -- may lie ahead.
Both scenarios are possible, says Mr Apisit.
The Gold Research Center forecasts gold prices this year will move to a range of $1,100 to $1,350 an ounce, and in this quarter alone will hover around $1,200-$1,300.
Other big name companies are calling for lower gold prices, which suggests they believe that the gold rally is petering out.
Scotiabank anticipates gold averaging $1,090 in 2016; Citi Research predicts gold averaging $1,030 in the first quarter and then declining gradually to an average of just $960 in the final quarter; Societe Generale sees gold at $955 in the fourth quarter of 2016.
Goldman Sachs and JPMorgan Chase are of the same mind. Both predict the precious metal will fall to the $1,000-physical barrier or lower this year.