By Sky News
SkyNews - Thursday, September 11 12:51 pm
In these dark economic times there is precious little to get excited about - but gold is going to recover from a lacklustre six months.
Those keeping an eye on the price of gold might have noticed that, having hit an all time high over $1,000/oz in mid-March, today it's languishing at around $770.
So, does that mean we could see gold falling much further in the next few months?
The answer is a clear "no", according to the precious metals consultancy GFMS.
We are expecting the price to rally again in the short to medium term, although a new record is not thought likely.
Gold's recent slide is down to such factors as the general drop in commodity prices - in particular oil - and the recovery in the US dollar.
This second point is important because investors often buy gold if they think financial instability, such as dollar weakness, is around the corner but sell the metal if all looks rosy.
However, we believe the dollar's recent gains are overdone and, should they unwind and there be further bank failures, then gold could easily sail back over $900 - especially if we see growing concerns over the US government's creditworthiness.
Of course, more parties are involved in the metal than just investors and we expect these others to be broadly supportive of the price.
For example, sales by central banks should fall in the coming months and the amount getting recycled isn't responding that strongly to still-high prices.
Perhaps more importantly, traders in the price-sensitive jewellery markets, most obviously India, have been very active in replenishing stocks over the summer and that is thought to have put a good floor under the price.