The gold price is treading water today, failing to find a direction but according to some, a further break to the upside is inevitable as the year unfolds.

According to James Luke, fund manager at Schroders, the market has got it all wrong, and higher interest rates in the US will not be a burden on the gold price and if history is anything to go by the precious metal will rise right alongside interest rates,

"Although past performance is not a reliable indicator of future results, the gold price has tended to rise from the beginning to the end of Federal Reserve hiking cycles. In the last four instances when the Fed embarked on a hiking cycle, in three of the four instances gold saw +10% to +20% returns from beginning to end.”Mr Luke said

“The environment for gold investments remains positive. In the background, global record debt burdens have not magically vanished. These make global growth highly sensitive to any real increase in interest rates and the cost of servicing these debts. He added.

Also according to Mr Luke, another driver of the gold price will be when investors begin to diversify their portfolios away from Assets such as real estate and the stockmarket to reduce exposure and mitigate risk,

“Given investors’ high exposure to the traditional asset classes, there is an urgent need to find uncorrelated and attractive alternative investments. Liquid and tangible portfolio diversification options are limited, making gold and gold related investments unique and of use to many investors”. He said.