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Gold May Advance on Demand for Dollar Alternative, Survey Shows

By Claudia Carpenter

Nov. 26 (Bloomberg) -- Gold may rise for a second straight week on speculation that a weakening dollar will spur demand for the precious metal as an alternative investment.

Seventeen of 25 traders, investors and analysts surveyed by Bloomberg from Mumbai to New York on Nov. 22 and Nov. 23 advised buying gold, which rose 4.8 percent last week to $824.70 an ounce in New York. Six said to sell, and two were neutral.

Gold is up 29 percent this year as the dollar declined against six major currencies, including the euro and yen. The dollar has weakened on speculation a U.S. housing slump and credit-market turmoil will force the Federal Reserve to cut interest rates for a third time this year.

Last week's gain in gold surprised most analysts surveyed Nov. 15 and Nov. 16. The survey has accurately forecast the direction of prices in 115 of 187 weeks, or 61 percent.

This week's survey results: Bullish: 17 Bearish: 6 Neutral: 2

To contact the reporter on this story: Claudia Carpenter in London at [e-mail]
Last Updated: November 25, 2007 12:06 EST