Gold May Extend Gain to Record This Week on Economy Concern, Survey Shows

Gold may extend its advance to a record as uncertainty over the economic recovery boosts investment, a survey found.

Sixteen of 20 traders, investors and analysts surveyed by Bloomberg, or 80 percent, said the metal will gain next week. Two forecast lower prices and two were neutral. Gold for December delivery was up 2.3 percent for this week at $1,275.10 an ounce at 11 a.m. yesterday on the Comex in New York, after futures climbed to a record $1,279.50 earlier in the day.

Gold rallied this year as investors grappled with conflicting reports about the strength of the economy amid signs that European governments will struggle to contain their budget deficits and as China moved to cool growth. The Federal Reserve kept its main interest rate at a record low to stimulate growth and will meet next week. Bullion is up 16 percent this year.

“We expect the strength to continue as economic uncertainty continues to draw investment diversification,” said James Moore, an analyst at TheBullionDesk.com in London. “Physical seasonality will provide background support.”

Households in India, the biggest gold user, typically increase jewelry purchases in the year’s final months to mark festivals and weddings.

The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling that most respondents expect a decline. The green line shows the gold price. The data shown are as of Sept. 10.

The weekly gold survey that started six years ago has forecast prices accurately in 188 of 328 weeks, or 57 percent of the time.

This week’s survey results: Bullish: 16 Bearish: 2 Neutral: 2

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.

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