Analysts said the rallies before 2012 were driven by money flowing into the metal, owing to consecutive rounds of monetary policy easing by the US Federal Reserve. Then, global economies were in the doldrums and investors put money into gold, as it was considered a safe haven' instrument.
However, despite the third round of monetary policy easing by the Federal Reserve last year, gold didn't record any rally, showing investors weren't keen on investing in the metal.
"Recently, when the Fed (Federal Reserve) came up with QE3 (the third round of quantitative easing), there was no new crisis, the markets were tired of safety and fund managers were looking for returns rather than safety. This means printing of money alone wouldn't drive gold prices; it has to be accompanied by a major economic catastrophe," said Kishore Narne, associate director and head (commodity & currency), Motilal Oswal Commodity Broker.