RBC Capital Markets says demand from China and India, physical gold ETFs and central bank purchases can push the precious metal higher, Barron's reported.

RBC lifted its 2016 average gold price estimate by 9% from $1,150 per ounce to $1,250 per ounce, its 2017 forecast 8% from $1,200 to $1,300 and its long term forecast 4% from $1,250 per ounce to $1,300 per ounce, Barron’s reported.

“A more dovish posture from the Fed, declining real rates and improving fundamental demand for physical gold, have led to our more positive outlook for gold,” RBC explained in Barron’s.

“For the balance of 2016 we expect gold to trade in a broad $1,200/oz to $1,300/oz range with the gold price improving over the course of the year. There are a number of positive demand catalysts, including steady fundamental demand from China and India, systematic central bank purchases, and US inflows into the physical gold ETFs.”

Meanwhile, Spot gold touched a high of $1,262.60 an ounce before easing back to $1,258.26 by 1350 GMT, little changed from late on Monday. U.S. gold futures for June delivery were up $2.60 an ounce at $1,260.60, Reuters reported.

Scaled-back expectations for further monetary tightening this year helped gold to its best quarter in nearly 30 years in the three months to March, after the U.S. central bank raised rates in December for the first time in nearly a decade.

"Negative yields in my opinion remain the key reason for buying gold, and silver. That story will not go away," Saxo Bank's head of commodities research Ole Hansen said.

(Newsmax wire services contributed to this report).

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