Ultra-calm trading conditions in gold are becoming self-perpetuating as a persistent lack of volatility frustrates investors seeking a return, pushing them further away from a market that analysts say could be becalmed for years.
Gold, which saw a dramatic reversal last year after a 12-year bull run took prices to record highs in 2011, has seen the spread between its daily price highs and lows narrow to just $15 an ounce this year on average, from nearly $25 in 2013.
Implied volatility, an estimation of an asset's future volatility, has dropped in gold to around 12 percent this month from an average of 19 percent in August last year, and from highs of nearly 60 percent in mid-2008.
With the dollar strengthening, equities showing a better return, and signs of inflation still notably absent from most developed economies, the metal has run out of reasons to rise.
"We are pretty unexcited by the outlook of gold," Charles Morris, head of absolute return at HSBC Global Asset Management, said. "It could stay in this range for another five years.
"If inflation is under control for a long period of time, then gold will be under control for a long period of time, and because you don't get a yield, it is a waste of money to have a large position in gold."
Gold is not the only market to be losing momentum. Volatility in the global foreign exchange market approached historic lows in July, while average daily volumes dropped by almost 14 percent, data from FX settlement system CLS showed.
"What the central banks have done to provide liquidity has pushed down volatility in the commodity market, and interest rates market, and indeed equities," Credit Suisse analyst Tom Kendall said. "They all feed through to every part of the traded economy, so it is a problem for FX traders, it is a problem for interest rates traders, it's a problem across everything."
As an asset in its own right, gold does not lack price drivers at the moment. The problem is, they are working against each other.
Federal Reserve policy is slowly normalising after years of ultra-loose conditions, which had fed into rising gold prices. The U.S. central bank has signalled that it is ready to start thinking about raising interest rates, probably next year.
That should be pushing prices lower, as should a rise in the dollar index this year. But working against that is uncertainty over the long-term inflationary