LONDON (Reuters) - Global gold demand is set to pick up with the end of summer doldrums and the last quarter may see more buying than last year as prices have been less volatile, analysts and traders say.

Growing acceptance of higher bullion prices and rapid economic growth in key consuming nations would lift gold buying, which is already on a recovery path after falling by nearly 10 percent last year due to volatile markets.

Spot gold traded in a wide range of more than $200 an ounce in 2006, when it hit a 26-year high of $730. But the metal has been less choppy this year, with prices ranging in a band of less than $100. The metal was quoted at around $668 on Friday.

"I suspect as we move towards the latter part of the year, the buying pressure will increase in line with the fact that we are heading towards the Christmas period, the Chinese New Year etc.," said Darren Heathcote of Investec Australia in Sydney.

World identifiable demand for gold rose about three percent to 822 tonnes in the first quarter of 2007 from the same period last year and by more than 19 percent to 922 tonnes in the April-June period, according to the World Gold Council.

China's gold demand is likely to remain robust after surging 31 percent in the first half of 2007, Turkey's gold imports could set a new record this year and buying in the Middle East may go up with festivals and a rising number of tourists.

There has been no sign of a decline in jewellery demand in the United States despite the potential for an economic slowdown, but demand in Japan may slip this year due to high gold prices in the local currency, traders and an industry official said.

"We are seeing a very significant restocking process going on in the markets, primarily for India, as we are heading to the heavy festival season," said Andy Montano, a director at bullion dealer ScotiaMocatta in Toronto.

By Atul Prakash - Analysis - Full Story:
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