Central banks and pessimistic investors are laying the groundwork for what could be a jump in the price of gold from its current level below $1,400 per ounce, according to a note Tuesday from a UBS analyst.

UBS analyst Joni Teves writes that the “extreme” number of investors holding short selling positions in gold might actually encourage a “decent” price hike in the future. 

Since the number of investors betting on a price decline is at an all-time high, writes Teves, aggressive attempts to make prices fall are made “relatively more difficult.” Similarly, factors pushing up prices will obtain a more significant market reaction, as these investors scramble to cover their short positions.

In addition, central banks in countries like Russia, Kazakhstan and Azerbaijan continue to buy gold to increase their reserves.

“Buying from these central banks highlights the trend for increasing gold reserves, especially among EM [emerging markets] central banks, which we expect to remain in place this year,” says Teves in the note.

Russia added 8.4 metric tons to its reserves, Kazakhstan bought 2.6 tons, and Azerbaijan went for an extra ton of gold. In her note, Teves notes that although central bank purchases don’t directly impact prices, they boost some investor sentiment.

Still, Teves says that gold has faced problems breaking past the psychologically important price milestone of $1,400 per ounce, which suggests many investors still look to profit by selling gold at the peak of brief price rallies.

“Sentiment remains weak and there are no anticipated shifts in the macro space in the near future that could trigger a material change in investors’ current attitude towards gold,” Teves says.