While gold prices were widely expected to continue their slide in 2014, that hasn’t happened. Gold prices have rallied by about 7.5 percent for this year even as the Federal Reserve has been tapering its monthly bond purchases after its past three meetings. A number of factors have contributed to gold’s improvement, ranging from tensions in the Ukraine to transient weather events radically boosting food prices, but there are three primary forces helping to push gold higher.

The first is the reemergence of at least some inflation here in the US. As I wrote in this issue’s feature article, both the producer price index and the consumer price index have been pushing to new recent highs. Granted, those highs are only 2 percent and 2.1 percent, respectively, but they are a clear indication that inflationary pressures are building. And while wage growth was largely nonexistent in the first quarter of this year, the issue has come up in a number of earnings calls as companies have opined that wages are likely to begin picking up in the back half of the year. That is yet another tick in the “inflation is coming” column.

Second, gold prices have also staged a minor recovery on the expectation that European Central Bank (ECB) will likely engage in further easing in June. According to European media reports, at least two members of the banks executive board are expected to propose further cuts to the bank’s main refinancing rate, taking it down by 10 basis points to 0.15 percent, and that its deposit rate will likely be effectively cut to negative to boost lending.

While a negative deposit rate would be unprecedented in the region, ECB President Mario Draghi said earlier this week that the bank was poised to further ease policy at its June meeting to support the euro zone economy. So while we don’t know precisely what actions will be taken, further ECB easing does appear to be a given.

Finally, while gold production is forecast to once again hit a new high in 2014, the production outlook for 2015 is becoming increasingly murky. Most of the production gains so far this year have come from the major gold miners, able to extract the metal at reasonably low production prices and still leaving some meat on the bone. Many smaller producers have already announced production cuts for the year and an estimated $15 billion to $20 billion has been cut from development spending across the industry, so it is unlikely that 2015 will see a new production high.

Demand from India and China, two key gold consuming markets, also remains relatively robust, with India widely expected to cut gold import restrictions in the coming months and cut the 10 percent tax on shipments. That will further underpin global gold demand this year.

That makes it look increasingly likely that Goldcorp’s (NYSE: GG) positive first quarter numbers aren’t going to be an anomaly.

In the first quarter, net income declined by 12 cents on a year-over-year basis largely due to lower gold prices, coming in at 33 cents per shares. Profit, however, beat even some of the most optimistic forecasts coming in at 26 cents, thanks to falling costs. All-in sustaining costs fell to $840 per ounce versus $1,134 in the same period last year.

While Goldcorp abandoned its bid to purchase Osisko Mining Corp, it did successfully complete the sale of its interest in Pimero Mining Corp and its less productive Marigold mine over the course of the quarter. Despite its acquisition failure, the company still expects to boost its output by 50 percent over the next two years and its starts up new mines in Canada and Argentina. After producing 2.67 million ounces of equivalent last year, it expects full-year 2014 production to total between 2.95 million and 3.1 million following the disposition of the Marigold mine.

While volatile gold prices will continue to pose a headwind for the company, with prices appearing to stabilize somewhat it should be able to boost earnings from here thanks to aggressive cost cutting which, so far, hasn’t affected production levels.

While gold miners are a somewhat riskier proposition today than they have been in years past, rising inflation expectations and central bank easing means GoldCorp remains a buy up to 39.