Gold May Rise for Third Week on Demand for Cash Alternative

By Pham-Duy Nguyen

Feb. 2 (Bloomberg) -- Gold may rise for a third straight week on speculation that demand for an alterative to cash will spark purchases of the precious metal.

Twenty-two of 31 traders, investors and analysts surveyed from Mumbai to Chicago on Jan. 29 and Jan. 30 advised buying gold, which rose 3.4 percent last week to $928.40 an ounce in New York. Eight said to sell, and one was neutral.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, reached a record 843.6 metric tons on Jan. 29. The metal gained 5 percent in January.

Traders surveyed on Jan. 22 and Jan. 23 anticipated gold’s advance last week. The survey has forecast prices accurately in 147 of 247 weeks, or 60 percent of the time.

Last week’s survey results: Bullish: 22 Bearish: 8 Neutral: 1

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