Gold, historically considered a "safe haven" investment, has had a year of ups and downs correlating with investor confidence.
However, Michael O'Kane from NZ Mint told TVNZ's Business programme that the market is seeing a shift in how gold is traded - but inflation and investor nervousness still play a part in dictating the price.
Nervy investors worried about Europe have in part shaped this shift in trading, he said.
"Gold's gone from being a hedge for inflation and a safe haven asset to more of a risk on risk off sort of driven price," he said.
"Normally what we'd see is gold to steadily build but what we're seeing is it drop when risk aversion kicks in and pick up again when people are willing to go into risky situations".
In the first quarter of 2011 it was priced at $USD1420. By the fourth quarter, it was trading between $USD1600 and $USD1800
Historically, gold has been an "insurance policy," he told AMP Business.
"People put 5-10% in their policy. They just sit on it - it doesn't return anything but it provides a great insurance policy if everything goes backwards."
Gold is still attractive to large retail and institutional investors, said O'Kane, because they can get in and out of it quickly and they are getting good returns.
But inflation is still a driver of price, he said.
"The JP Morgans, the Society Credit Suisse - all of those groups are picking for a very large pick up for 2012."
As for physical supply of the commodity, it has not "dwindled" but is dropping off.
"South Africa, the largest supplier for the last 80 plus years, is now number six on the scale - China has probably moved up to number one."
However he said the Central Bank Gold Agreement, which has historically sold 500 tones a year, is about to buy 500 tonnes. This will take 1,000 tonnes off the market.
O'Kane said gold prices have surged over 2011 and look set to rise in 2012.
In 2011, the price went from $USD1350 to $USD1920.
He said he is "fairly confident" gold will crack $USD2000 next year but when exactly is "hard to pick".