Gold, which reached a record this week, may extend gains as investors seek a protection of wealth and an alternative to a weakening dollar, a survey found.
Sixteen of 23 traders, investors and analysts surveyed by Bloomberg, or 70 percent, said the metal will rise next week. Six forecast lower prices and one was neutral. Gold for December delivery was up 1.3 percent for this week at $1,293.60 an ounce at 11 a.m. yesterday on the Comex in New York. Futures climbed to a record $1,298 on Sept. 22.
The dollar slipped to a five-month low against the euro on Sept. 22 after the Federal Reserve left its benchmark interest- rate target at a record low and pledged to take more steps to spur growth if necessary. Holdings of bullion through exchange- traded products were at a record 2,089.74 metric tons as of Sept. 22, data compiled by Bloomberg from 10 providers showed.
“The U.S. currency is clearly still paying the price for the latest statement by the U.S. Fed,” said Eugen Weinberg, head of commodity research at Commerzbank AG. “As long as the U.S. dollar remains weak, gold prices should remain well supported.”
Gold gained 18 percent this year as investors sought a protection of wealth. While a report yesterday showed U.S. home sales were slightly stronger than economists had forecast, the number of Americans seeking unemployment benefits unexpectedly rose in the week ended Sept. 18 and Europe’s services and manufacturing industries slowed this month more than economists forecast.
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. 17.
The weekly gold survey that started six years ago has forecast prices accurately in 189 of 329 weeks, or 57 percent of the time.
This week’s survey results: Bullish: 16 Bearish: 6 Neutral: 1