Gold briefly touched a four-month high as money managers and investors increased exposure to precious metals exchange traded funds.

Meanwhile, hedge fund managers have raised their long-only position in U.S. futures and options by 12% from a week earlier, or the most since June, while Bloomberg data show ETF investors have hoarded bullion for the past six sessions after months of redemptions, Bloomberg reports.

Gold prices have rebounded off their March lows on a weakening U.S. dollar and signals that the Federal Reserve will maintain its accommodative monetary policy to support the economic rebound, despite signs of rising inflation. Analysts also project that further gains in consumer prices could provide additional support for gold as a better store of wealth.

“Following months of outflows, returning speculative interest could ultimately spark a breakout” in gold, TD Securities analysts led by Bart Melek said in a note.

TD Securities analysts, though, warned that the rise in consumer prices could be transitory “but there remains a substantial amount of uncertainty surrounding the path for inflation. Nonetheless, considering that gold is underperforming against periods of high inflation, we see substantial upside risks for the yellow metal.”

The recent bout of market volatility could also help support the outlook for gold, especially as the market’s attention focuses on the sudden plunge in Bitcoin, which has been propped up as a replacement for gold.

With the gold price jumping “as equities fall and cryptocurrencies slide, any debate about bitcoin challenging gold as a ‘safe haven’ just got a very blunt answer from the markets,” Adrian Ash, director of research at BullionVault, told MarketWatch.

“While the precious metal isn’t immune to volatility, gold has never cut its price in half inside a week,” Ash added. “Whatever role crypto might play today or in future, it can’t replace gold as a diversification tool for savers and investors wanting to cut their overall portfolio risk.”

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