REUTERS: Gold prices could rise above US $ 1,200 an ounce in the next few months as fears of a currency war following the devaluation of the yuan make equity markets choppy, boosting physical Gold and ETF buying, leading industry analysts said at a conference.

The metal has already rebounded about 8 percent from July’s 5-1/2 year low, boosted by minutes of the Fed’s last policy meeting that dented expectations for an imminent rise in U.S. rates. Spot prices hit a peak of US $ 1,168.40 on Friday.

“After the devaluation of the Chinese currency, people are worried,” said Rajan Venkatesh, head of India bullion at ScotiaMocatta, part of Canada’s Bank of Nova Scotia. “They are afraid of a currency war. They are going back to gold.”

Prices could rise to US $ 1,230 to US $ 1,240 within a month, he said on the sidelines of the International Gold Convention in the city of Panaji in western Goa state. Michael Mesaric, Chief Executive of the world’s biggest gold refiner, Valcambi, said deposits in gold-backed exchange-traded funds are hovering near their lowest levels since 2008 but current prices will attract new buying. He expects gold prices to rise to US $ 1,350 by mid-2016.

The recent bounce notwithstanding, gold has been under heavy pressure this year from expectations the Fed would raise rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding bullion while boosting the dollar.

But analysts like Jeffrey Rhodes, founder of Dubai-based precious metals consultancy RPMC, said: “All the bad news for gold is in the press”.

“There is room in the world for strong dollar and strong gold,” said Rhodes, expecting higher demand in countries such as India, China and Greece, where currencies are depreciating. “And strong gold is an alternative to emerging market currency.”