Basically, gold prices are affected by supply and demand, world political situation, changes in exchange rate, global economic situation, interest rate and national emergencies amongst others. This week, gold prices have on a bullish trend. Various commodities index have also climbed up. With the U.S. COMEX gold futures climbing 0.68%, the S&P, Stoxx and the CRB Commodities Index also rose 0.85%, 2.7% and 1.37% respectively.

On the basis of these trends one may assume that the gold price in the future will incline further.  Similarly, several economic data have been supporting gold prices as well. Apart from the rise in the Chinese July CPI by 1.8% year-on-year, Industrial production slowed down from 9.5% in June to 9.2% in July, retail sales also slowed from 13.7% in June to 13.1% in July. Also, exports in July enhanced only by 1% and imports rose by 4.7% in China.

On the contrary, the positive reactions of commodities to the U.S. data have pressured the gold prices downwards. The news like the fall in U.S. weekly jobless claims, increase in payroll of 163,000 in July also contributed in the fall. Overall, we have a positive outlook for commodities in 2012. Prices are likely to move higher as economic activity improves and the US dollar remains in a weak trend. So, the price of gold is in an indecision stage. It will probably take time to know the changes in the prices of gold. Also, the Fed or the ECB real measures of quantitative easing is the issue to be observed to determine the prices of gold. Also the traders must look out for upcoming important data like France and Germany's preliminary Q2 GDP on 14th August, and the U.S. weekly initial jobless claims and July housing starts on 16th August.

The prices of gold will hinge on these upcoming developments as market analysts and investors undertake to determine the long term trend of the yellow metal.