Gold Poised for Eighth Straight Annual Gain on Investor Demand

Dec. 31 (Bloomberg) -- Gold was poised for its eighth straight annual gain and may continue to rise in 2009 on speculation geopolitical tensions and a weaker dollar will boost demand for the metal as a haven.

Bullion has gained 4.2 percent this year and reached a record $1,032.70 an ounce in March. The metal’s 13 percent rally this month has stalled as Israel weighs a French proposal for a 48-hour cease-fire in its five-day assault on the Gaza Strip. The dollar fell for a second day against the euro.

“Gold remains the best performing metal for 2008,” Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said in an e-mail note today. “All roads point to gold continuing its ascent in 2009.”

Gold for immediate delivery was 0.6 percent lower at $868.83 an ounce at 11:10 a.m. in Singapore after losing 0.8 percent yesterday. It reached $890.49 on Dec. 29, the most since Oct. 10.

February-delivery gold was barely changed at $869.90 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.

“Investment awareness via exchange traded commodities, or ETC, and exchange traded funds, or ETF, will remain strong,” Barratt said. “Geopolitical concerns are keeping it bid and a weaker U.S. dollar is also keeping it bid.”

As many as 369 Palestinians have been killed and 1,400 wounded since Israel started its aerial campaign, according to the Palestinian emergency services office in Gaza City. Three Israeli civilians and one soldier have died in the rocket attacks that Israeli leaders say the offensive is designed to stop. A six-month cease-fire with Hamas expired Dec. 19.

ETF Soars

Investment in the SPDR Gold Trust, the largest exchange- traded fund of gold, has climbed 24 percent this year to a record 780.2 metric tons on Dec. 29. The fund has overtaken Japan as the world’s seventh-largest gold holding.

Silver for immediate delivery fell 0.3 percent to $10.93 an ounce. The metal is down 25.7 percent this year, the first annual decline in eight years and the largest since 1984.

Immediate-delivery platinum declined 0.2 percent to $915 an ounce, having reached $935 on Dec. 29, the highest since Oct. 16. The metal lost 40 percent this year, snapping the previous six yearly gains, as global car sales slumped.

Platinum, which reached an all-time high of $2,301.50 in March, is used in pollution-control devices in cars and trucks.