Analysts at Morgan Stanley agreed the recent fall in prices did not signal the end of the bull market in gold.

“We attribute the most recent price decline from the late February peak to the market's declining conviction that the Fed will adopt a new round of quantitative easing (QE3) or other unconventional monetary policy to confront risks to US growth,” they wrote in a note to clients.

“Negative real interest rates, the prospect of further unconventional monetary policy in the US and Europe to confront uncertainties on the growth outlook, and heightened political tensions in the Middle East are all expected to underpin strong investment demand,” Morgan Stanley said.

Gartman Cuts Gold Position

Going against the trend, Dennis Gartman , Founder of the Gartman Letter told CNBC on Tuesday that he had cut his gold position – which is mainly yen-denominated – in half and that he would retain that position “for a while longer”.

“I don’t like being long of gold. I don’t like the gold bugs," he said referring to investors that are bullish on the commodity. "I’m not a believer that the world is coming to an end.”

“Nonetheless the trend in gold in all sorts of currencies, whether in dollar terms, euro terms, yen terms, has been…from the lower left to the upper right,” he conceded.

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