August 5 - Gold may extend gains from a record as investors seek a protection of wealth and an alternative to currencies, a survey found.
Thirteen of 25 traders, investors and analysts surveyed by Bloomberg, or 52 percent, said bullion will rise next week. Eight predicted lower prices and four were neutral. Gold for December delivery was up 3 percent for this week at $1,679.50 an ounce by 11:15 a.m. yesterday on the Comex in New York after earlier that day reaching an all-time high of $1,684.90.
Bullion reached records in euros and pounds this week as Moody’s Investors Service and Fitch Ratings warned that U.S. downgrades were possible and as bond yields for Spain and Italy climbed to euro-era records. Japan followed Switzerland in seeking to weaken its currency, while the MSCI All-Country World Index of stocks yesterday fell more than 10 percent from its high in May, entering its first so-called correction in more than a year.
“Gold is still proving its character as a store of value in the current market environment, marked by equity markets tumbling sharply in part and continued high risk aversion,” Commerzbank AG analysts said in a report. If the franc and yen lose their safe-haven appeals, “only gold would remain and the interest in gold should increase further.”
The attached chart tracks the results of the Bloomberg survey, with the red bars derived by subtracting bearish forecasts from bullish estimates. Readings below zero signal that most respondents expect a decline. The green line shows the gold price. The data are as of July 29.
The weekly gold survey, which started seven years ago, has forecast prices accurately in 216 of 374 weeks, or 58 percent of the time.
This week’s survey results: Bullish: 13 Bearish: 8 Neutral: 4