Updated from 12:43 p.m. ET with settlement prices

NEW YORK (TheStreet) -- Gold prices gained for a second consecutive day to begin 2014 as investors appear to view the yellow metal as oversold and ripe for a rebound.

Gold for February delivery at the COMEX division of the New York Mercantile Exchange climbed $13.40 to $1,238.60 an ounce. The gold price traded as high as $1,239.60 and as low as $1,221.30 an ounce, while the spot price was adding $12.07, or 0.98%.

While some analysts see the $30 rise in gold during the past two trading days as a sign that the asset is regaining favor among investors, others have warned market participants to be careful.

"We're still fairly thin, we're not at full bore, yet, in volume in the markets," Peter Hug, global trading director at Kitco, said in an interview. "I'd like to see this momentum carry into next week when everybody's back and fully operational."

Gold futures lost more than 28% in 2013, the largest drop since 1981 and the first yearly loss since 2000, as investors rotated into the stock market, which popped 30% last year.

The Federal Reserve's announcement in December that it would scale back its economic stimulus program concluded a year-long worry among gold investors that the central bank would eventually slow down monetary stimulus, which many market participants have viewed as an anti-inflationary policy. Some investors use gold as an asset hedge against inflation.

Silver prices for March delivery tacked on 8 cents to close at $20.21, while the U.S. dollar index was climbing 0.2% to $80.75.

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