Gold May Rise for 2nd Week as Interest-Rate Cuts Weaken Dollar

By Pham-Duy Nguyen

Dec. 15 (Bloomberg) -- Gold may rise for the second straight week on speculation the Federal Reserve will cut its benchmark bank-lending rate, weakening the dollar and boosting the appeal of the precious metal.

Twenty-one of 27 traders, investors and analysts surveyed from Mumbai to Chicago on Dec. 11 and Dec. 12 advised buying gold, which rose 9.1 percent last week to $820.50 an ounce in New York. Three said to sell, and three were neutral.

Last week’s gain was the biggest since Sept. 19. Gold reached a record $1,033.90 in March as Fed rate cuts sent the dollar to an all-time low against the euro in July.

Gold’s gains last week surprised most analysts surveyed on Dec. 4 and Dec. 5. The survey has forecast prices accurately in 142 of 241 weeks, or 59 percent of the time.

Last week’s survey results: Bullish: 21 Bearish: 3 Neutral: 3

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