As gold prices fell to a two-year low last week, unprecedented physical demand from all over the world started to take advantage of the low prices, leading to a notable rebound, an expert with Dubai's first bank Emirates NBD said Friday.

The rebound from a two-year low of $1,325 to $1,406. 50 per ounce this week was triggered by bargain hunters, said Gerhard Schubert, head of the bank's precious metals department.

"The other side of the coin is the ongoing liquidation from exchange traded funds," said Schubert, adding that the liquidation was seen magnified by increased margin requirements from various exchanges and the volumes traded on the exchanges were massive.

The Swiss investment fund "Top Gold invest," for example, once a highflyer among precious metals funds, fell to a five-year low at around 200 dollars, down 25 percent year-to-date.

Regarding the further outlook, Schubert said "a significant amount of gold mining companies will start seeing negative cash flow scenarios, if prices do establish themselves around or even under the $1,300 per ounce level."