Gold May Extend Drop as Dollar Gains Against Euro, Survey Says

By Pham-Duy Nguyen

Aug. 11 (Bloomberg) -- Gold may fall for a fifth straight week as the dollar strengthens against the euro, eroding the appeal of the precious metal as an alternative investment.

Twelve of 23 traders, investors and analysts surveyed from Mumbai to Chicago on Aug. 8 and Aug. 9 advised selling gold, which fell 5.7 percent to $864.80 an ounce last week in New York. Ten said to buy, and one was neutral.

Gold, priced in dollars, generally moves in the opposite direction of the U.S. currency. The metal's decline last week was the most since March and the euro's drop against the dollar was the most since May 2007. Gold reached a record $1,033.90 in March as the dollar headed to an all-time low against the euro.

Gold's decline last week surprised a majority of analysts surveyed July 31 and Aug. 1. The survey has forecast prices accurately in 134 of 223 weeks, or 60 percent of the time.

This week's survey results: Bullish: 10 Bearish: 12 Neutral: 1

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.