Gold started Wednesday's trading session at $1,214 but rallied sharply at noon following Federal Reserve Chair Jerome Powell's dovish stance on the economy during a speech he gave at the The Economic Club of New York.
Powell's speech signaled that interest rates are almost already at neutral, pushing the dollar down and gold up past $1,230 an ounce before stabilizing at $1,220.
Frank Holmes, CEO of U.S. Global Investors, said that one of the main short-term drivers of gold prices is still the ongoing trade war with China.
"Everyone's waiting in the short term for something positive out of China and will China back down and find a new process to re-negotiate the tariff war. It's really in China's court to show that they want to be more understanding and it's an un-level playing field clearly when you look at tariffs around the world between the U.S. and any other country in the world," Holmes told Kitco News.
On oil, Holmes said that the collapse of crude prices over the past few months signals slower global growth.
Holmes added that cryptocurrencies and gold are not comparable, since gold has real monetary value while crypto prices are sentiment driven, and this difference explains why bitcoin's collapse this year hasn't returned investor sentiment back to the gold space.