Gold prices have been edging up from Tuesday and are hovering around their highest levels in nearly a year. Some analysts are predicting that gold rates could rise even further.
Here are the key reasons fuelling gold's rise:
'The war risk'
North Korea on Sunday conducted its sixth and most powerful nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, prompting the threat of a "massive" military response from the United States if it or its allies were threatened.
"The war risk helped gold and it has been bid because of the weaker dollar," said Andrew Cole, a fund manager at Pictet Asset Management, adding he saw "further upside".
Gold is used as an alternative investment during times of political and financial uncertainty - as a safe haven and that appeal is now growing.
"Safe-haven buying's been fairly strong over the past few days but there’s still a level of uncertainty about what the North Korean crisis will mean for markets," ANZ analyst Daniel Hynes said.
Dollar falling to over two-year lows
The US dollar has been falling against a basket of other major currencies - recently falling to its lowest level since January 2015, largely due to speculation the US Federal Reserve is unlikely to raise interest rates as quickly as anticipated.
That has made dollar-denominated gold cheaper for holders of other currencies; a relationship used by funds to generate buy and sell signals from mathematical models.
"We've had uncertainty related to (US President Donald) Trump's inability to pass his growth-friendly policies and the Fed seem to be more dovish," Ole Hansen, head of commodity strategy at Saxo Bank, said.
"Gold positioning is bullish. The ratio of longs to shorts is at its highest since late 2012, for every short there are 19 long positions," he added.
Loose monetary policy
Also reinforcing gold is loose monetary policy in many parts of the world.
“There is a general unease about the management of currencies and the role central banks have played in that,” Pictet’s Cole said. “Look at bitcoin, an alternative currency, gold fits into that bill.”
On a strong footing technically too
On the technical front, analysts say, North Korea’s missile tests helped gold to break decisively through the $1,300 an ounce triple-top resistance, which now serves as support.
Upside barriers include $1352, near last September's high, followed by $1376, the upper Bollinger band on the monthly charts. However, the momentum indicator near zero suggests gold could be in for a period of consolidation.