Will Gold's Recent Rally Last -- or Will It Evaporate?

NEW YORK (TheStreet) -- The gold market reheated today as prices of the yellow metal jumped close to 2% by the end of Wednesday's trading session. Moreover, gold ETFs, including SPDR Gold (GLD) and iShares Gold Trust (IAU), also rallied today and are up for the year. This recent recovery comes after gold prices fell during most of July.

Will gold's recent recovery continue over the short term? And what about the long term?

The main issue to impact the progress of gold is the recovery of the U.S. economy. In recent weeks, several key economic reports were positive, including the GDP for the second quarter, which grew by 4%, and the non-farm payroll report, which showed another gain of over 200,000 jobs during July.

The demand for investments like precious metals tends to rise when the U.S. economy isn't doing well. So if the U.S economy continues to show progress, this could steer more investors away from gold investments such as gold ETFs and gold producers like Goldcorp (GG) and Primero Mining (PPP).

In the meantime, the recent rally in gold prices helped pull up gold ETFs and other gold related assets: SPDR Gold rose by nearly $2 a share to $125.67, while shares of iShares Gold Trust jumped by 1.6% to $12.67 Wednesday. Gold producer Goldcorp also bounced back by 1.7% to $28.16 per share, and Primero Mining added 1.04% to its stock and settled at $7.80.

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