Monday, December 22, 2008

Gold May Rise for Third Straight Week as Dollar Rally Stalls

Dec. 22 (Bloomberg) -- Gold may rise for the third straight week on speculation the dollar’s rally will stall, boosting the appeal of the precious metal.

Thirteen of 25 traders, investors and analysts surveyed from Mumbai to Chicago on Dec. 18 and Dec. 19 advised buying gold, which rose 2.1 percent last week to $837.40 an ounce in New York. Seven said to sell, and five were neutral.

The Federal Reserve on Dec. 16 cut its benchmark interest rate to zero to 0.25 percent from 1 percent, driving the dollar lower. Gold reached a record $1,033.90 in March, partly because of a decline in borrowing costs.

Most analysts surveyed on Dec. 11 and Dec. 12 anticipated gold’s gains last week. The survey has forecast prices accurately in 143 of 242 weeks, or 59 percent of the time.

Last week’s survey results: Bullish: 13 Bearish: 7 Neutral: 5