TORONTO (miningweekly.com) – While supply and demand fundamentals in the long term remain solidly positive for the gold price, there have been two recent developments that cast an even brighter glow over the outlook for the metal, Goldcorp CEO Chuck Jeannes said on Thursday.

This week, the gold price decoupled from its usual inverse trading relationship with the US dollar, in reaction to pressure on the euro over concerns about Greece.

“So, in the flight to safety from the euro, investors chose gold,” Jeannes commented.

“Too often, market commentators treat the gold price as a simple inverse call on the dollar.

“But I think this week's move is truly an alternative currency that provides protection against weakness in all paper currencies, not just the US dollar.”

The second encouraging development is the reversal in the trend of jewellery demand, which picked up noticeably in the first quarter of this year.

“Consumers appear to have reached a level of comfort with a gold price at over $1 100/oz,” Jeannes said.

“Certainly, we see both these recent data points as additional reasons for a very positive view of the gold price over time.”

But he added that Goldcorp does not place much emphasis on short-term moves in the price of gold.

“We are managing the business for the long term, and so we focus on the longer-term trends in the gold market,” Jeannes said.

“From that perspective, the supply and demand fundamentals remain very positive, with future mine supply expected to continue to decrease, coupled with dramatically increased investment demand on the other side of the equation.”

The gold price reached its highest point since December 4 during trading on Wednesday, at $1 174,18, spurred by concerns over European sovereign debt.

Goldcorp is the world's second-biggest gold miner by market value, after industry leader and fellow Canadian Barrick Gold.

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