Following the end of a week-long strike in Peru, Barclays Capital commodities analyst Suki Cooper believes that, assuming no new supply disruptions, gold prices will likely remain stable until September when sales rise in India and investor demand increases in the northern hemisphere.
"In September we see prices gaining upward momentum on the back of the buying typical of the Indian festival to take place later this year and the wedding season," Cooper told BNamericas.
While Indian celebrations are a major driver of physical sales that are capable of supporting gold prices at current levels, an expected increase in investor demand at the end of the northern hemisphere summer will likely propel prices to US$1,000/oz or higher in the latter part of the year, she added.
Gold on the London Bullion Market closed at US$916.75/oz Monday, down from US$931.25/oz the previous trading day. The yellow metal peaked above US$1,000/oz on March 17 and 18 but then returned to hover around US$900/oz for the rest of the year so far.
China displaced South Africa in 2007 as the world's largest gold producer. Peru is Latin America's largest producer of the metal.