Gold's hot streak is still in its early innings, say the managers behind two of the largest ETFs on the market backed by the precious metal.
Bullion wrapped up its best week since May on Friday as investors bought it to hedge against rising inflation figures, the latest being the more than 30-year record spike in consumer prices. It has climbed 7.5% since its recent bottom in September and is now within 2% of breaking even on a year-to-date basis.
Recovering demand for gold jewelry could propel the price of gold even further, State Street's George Milling-Stanley told CNBC's "ETF Edge" this week.
As chief gold strategist at State Street's SPDR ETFs, Milling-Stanley oversees the popular SPDR Gold Trust (GLD).
"Consumer demand led by gold jewelry mostly going into the emerging markets has done very, very well in the first three quarters of this year," he said.
Jewelry accounts for 50% of global gold demand followed by central bank reserves at 25%, individuals at 15% and industrial uses at 10%, according to iShares.
The next six months tend to see the highest demand in India with festival and wedding season underway, Milling-Stanley said. Additional catalysts from Chinese New Year and gift-giving season in the West could help propel the precious metal, he said.
"We should be running into what is typically the strongest period for gold demand in terms of jewelry in the year for the next five to six months and I think that's part of the reason why gold is where it is today, comfortably above that $1,800 level, which it's found very difficult to surmount during the summer and into the fall," Milling-Stanley said. "But here we are, wintertime. Gold's doing very, very well."
GraniteShares founder and CEO Will Rhind saw even more runway ahead.
His firm is behind the GraniteShares Gold Trust (BAR), the fifth-largest gold ETF on the market by assets under management, according to ETF Database.
"I'm very positive on the outlook for gold for next year and the reason is because of what's going on with the macro environment, particularly inflation," Rhind said, also highlighting the $1,800 level.
"We obviously had the tapering announcement last week and those that expected the gold price to fall were surprised when it actually mounted a fairly significant rally and I think that's in a way due to, still, the dovishness coming out of central banks" in the U.S. and U.K., he said.
Combine rate hike-resistant central banks with a supply chain crunch and inflation that may not be as transitory as expected, and it could attract even more buyers, Rhind said.
"We have real inflationary pressures that, the longer they persist, the more of a problem that causes and the more people will look for inflation hedges," he said.
"There just aren't that many places to hide and gold is one of those places that people have always gone to in times of stress and I think this data's a reason for still believing that gold is going to be there next year if there's an official acknowledgment that inflation is a problem."