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Doubters say the investors who have rushed to embrace gold in recent months may just as suddenly decide to ditch it.MICHAEL DALDER/Reuters

Gold fever is back, a sign of investors' growing – but perhaps misplaced – anxiety about what lies ahead for the global economy.

The World Gold Council, the marketing arm of the gold industry, announced on Thursday that demand for the precious metal hit its second-highest level on record during the first quarter of the year.

Meanwhile, Bank of Montreal analysts boosted their forecast for gold. They say they now expect the metal to begin next year at around $1,400 (U.S.) an ounce. That is well above its current level of roughly $1,270 and far ahead of the bank's previous forecast of $1,200.

In another indication of the growing optimism around bullion, Goldcorp Inc. said on Thursday that it was acquiring Kaminak Gold Corp. for $520-million (Canadian) in stock. Kaminak's key asset is the Coffee gold project about 130 kilometres south of Dawson, Yukon.

The acquisition, done at a 40-per-cent premium to Kaminak's recent share price, suggests that major gold producers may once again be ready to focus on expansion projects after several years of asset sales and heavy writedowns.

Precious metals stocks have rocketed higher since the start of the year as the price of gold has climbed from lows near $1,050 (U.S.) that it hit last December.

The share prices of several large miners have more than doubled, and eight out of the 10 top-performing stocks on the Toronto Stock Exchange so far in 2016 are gold or silver producers.

But despite the huge advances, a hard wall of skepticism remains. Doubters say the investors who have rushed to embrace gold in recent months may just as suddenly decide to ditch it.

The recent gold rally is "one-legged," according to Helima Croft and her team at RBC Dominion Securities.

The RBC analysts point out that the surge in gold demand during the first quarter was the result of a booming demand from investors in exchange-traded funds (ETFs). Despite the best quarter for gold purchases since the final three months of 2012, buying for jewellery dropped, as did demand for gold bars and coins.

ETF investors are a fickle crowd and it's not clear if they intend to stick with the metal.

"Admittedly, the growth in investment demand has been impressive, offsetting declines elsewhere," Ms. Croft wrote in a note Thursday. "However, we note that investment demand is often the quickest to turn."

Bullion has always been a bet on economic uncertainty. It pays no dividend or yield, but tends to shine when other investments are in disarray, especially when real interest rates – that is, rates after inflation is subtracted – are low.

During such rough patches, gold offers a refuge for spooked investors, while its lack of yield matters less than it does when competing investments are offering generous payouts.

The spread of negative interest rates in Europe and Japan, unexpected weakness in the U.S. economy and growing worries about China's outlook have provided fertile ground for pessimism in recent months and helped to swell gold's appeal.

The U.S. Federal Reserve was expected to ratchet rates higher this year to help control inflationary pressures in a recovering economy. Instead, it has sat on its hands as strong growth has failed to materialize.

The BMO commodity analysts argue that the prevailing uncertainty in the global economy is likely to persist for the rest of this year and could squelch any rate hikes by the Fed. The lower rates stay, the better for gold.

"We are not advocating an extreme doom-and-gloom and $10,000-an-ounce gold price argument," the analysts say, but rather emphasizing the concerns they hear from investors about the potential turmoil that could result as central banks try to unwind seven years of easy-money policies.

Despite their new optimism about gold, they warn that sentiment toward the metal could quickly sour. Net speculative positions in bullion are at a record high, suggesting that current gold prices already incorporate a lot of optimism.

In addition, gold prices nearly always decline between May and July. If that pattern, which has held true in 36 of the past 40 years, continues, it could deflate the enthusiasm around precious metals.

Then, of course, there's the risk that the global economy may turn out to be stronger than people think, leading central bankers to take action. "Maybe the Fed does decide to hike rates in July – which would be the biggest downside shock for gold prices, in our view," the analysts say.