The price of gold bullion rose after congressional testimony from Federal Reserve Chairman Ben Bernanke earlier this month, who said the U.S. central bank had no timetable for slowing its stimulus.
"A lot of people hold gold as an inflation hedge, but movements in gold prices don't predict inflation very well, " Bernanke said during the Senate Banking Committee. "Nobody really understands gold prices and I don't pretend to understand them either."
One of the downsides for gold owners has been the idea that significant inflation was threatening the U.S. economy. Over the last year, bullion has slipped more than 20% - losing its safe-haven appeal after the Fed signaled in June that it would being tapering its $85 billion in monthly asset purchases later this year.
The price is gold cracked the $1,300 barrier this week but is no where near the metal's record all-time high in September 2011 when it traded at around $1,920.
Investment firm Goldman Sachs even cut its 2013 year-end price target to $1,300 from $1,435 in June and lowered its 2014 prediction to $1,050 from $1,270.
"The U.S. dollar and gold used to be the save havens in the market," said Ulrich Leuchtmann, director of FX at Commerzbank Bank in Frankfurt. "But, at the moment, gold does not behave like a safe haven if you believe that this monetary policy would cause inflation."
The market has been bullish lately for the U.S. dollar with the greenback gaining against other currencies, rallying against the Euro and the Japanese Yen.