A salesperson arranges gold rings at a jewelry shop in Yangon, Myanmar, Aug. 13, 2019. Myanmar's domestic gold price edged higher with around 1.23 million kyats (816 U.S. dollars) per tical on Tuesday, U Aung San Win, vice-chairman of Myanmar Entrepreneurs Association, told Xinhua. (Xinhua/U Aung)

Gold prices hit a seven-year high on Wednesday amid a drastic escalation of tensions between the US and Iran, but short-term gains alone can't trigger Chinese investors' enthusiasm, analysts said.

Spot gold skyrocketed from a low of $1,460 per ounce in December to $1,579.89 at 5 pm (Beijing time) on Wednesday - its highest price since April 2013.

The gold price in Shanghai rose moderately on Wednesday. The price of the gold futures contract Au(T+D), which is traded on the Shanghai Gold Exchange, gained 1.34 percent to 356.05 yuan per gram ($1,454.15 per ounce) on Wednesday.

Gold-related A-share stocks also surged. Chifeng Jilong Gold Mining Co gained by the daily limit of 10 percent to close at 6.47 yuan ($0.93) and Gansu Ronghua Industry Group Co also rose by the daily limit to 4.36 yuan.

If the US-Iran geopolitical crisis is not resolved, concerns over a potential US-Iran war will persist in the short term, which will drive up the gold price further, said Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management.

Soaring gold prices saw domestic investors rush to sell the metal. Zhou Yinghao, an independent analyst of the gold industry, told the Global Times that a woman sold a package of gold, estimated to weigh at least a dozen kilograms, when he visited a gold collection center on Tuesday.

"There has been no sign yet that gold prices will continue to rise over several months, and that situation can't trigger domestic consumers' enthusiasm to further invest in gold," Zhou said.

Swiss bank UBS set the 2020 gold price target at $1,600, it said in a note, in part due to an interest rate cut in the US stemming from the slowing US economy, which reduced the cost of investing in gold.

It's worth noting that unlike the rush into physical gold stocks several years ago, now Chinese investors can directly buy and sell gold on their smartphones via WeChat mini programs and Alipay. Consumers can spend as little as 1 yuan to buy gold, which greatly lowers the investment threshold.

As gold sales generally ratchet up during traditional holidays like the upcoming Chinese Spring Festival, it is possible that a small number of investors are increasing purchases of physical gold, Wan Zhe, chief economist with China National Gold Group Corp, told the Global Times.

A recent report from the World Gold Council pointed to strong gold demand in 2020, noting that central banks will continue to buy gold as reserves. It also suggested that investors add gold to their assets.

As of the end of December, China's gold reserves stood at 62.64 million ounces, unchanged for three months in a row, data from the State Administration of Foreign Exchange showed on Tuesday.