FXstreet.com (Barcelona) - July has been an active month for gold prices, with several catalysts coming from several mediums. “Abstracting from some near-term volatility however, we expect the price of gold to ease from its current level as the recovery in the US economy gains momentum and its currency appreciates, albeit to a lesser extent than we have seen over the past month or so.” Writes Alexandra Knight, an Economist at NAB.

“This will in effect shift demand away from gold and towards currency-based investments – Chinese demand for gold should remain strong, supported by rising incomes, and while Indian demand may soften on the back of relatively high prices and a weak rupee, it will remain supportive overall.” she adds.

Mined supply should also benefit from new projects coming online in Latin America and the continued expansion in Chinese gold production. In addition, as copper production intensifies over coming years, more gold should be produced as a by-product. Knight forecasts that “In the medium to longer term, we expect more certainty surrounding the European sovereign debt situation to emerge and for the European economy to continue to muddle through more generally, while a relatively stronger US dollar and a return to fundamentals should also help to reduce prices.”