Gold may decline as speculation that governments could pare economic stimulus measures dampens demand for the metal, a survey showed. Nine of 19 traders, investors and analysts surveyed by Bloomberg, or 47 percent, said bullion would fall next week. Seven forecast higher prices and three were neutral. Gold for delivery in April was down 2.6 percent for this week at $1,106.50 an ounce at noon in New York yesterday.
China’s inflation reached a 16 month high and industrial production rose the most in more than five years, data showed yesterday. Bullion climbed 24 percent last year as central banks maintained low interest rates and spent trillions to stimulate economies. The metal reached a two week low yesterday on speculation that demand will slow as the Greek financial crisis eases.
“With further indications that China could accelerate monetary tightening, as inflation in China has risen, gold demand may wane,” said Walter de Wet, an analyst at Standard Bank Plc in London. “Of all the metals, we find that gold is the most sensitive to liquidity and interest rates.”
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling that most respondents expect a decline. The green line shows the gold price. The data shown are as of March 5. The weekly gold survey has forecast prices accurately in 174 of 302 weeks, or 58 percent of the time.
This week’s analyst survey results: Bullish: 7 Bearish: 9 Neutral: 3
Reporter Nicholas Larkin can be reached at nlarkin1@bloomberg.net.
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