Gold may rise for a second straight week on speculation demand from jewelers and investors this month will recover, outpacing production from the world's mines.
Eighteen of 28 traders, investors and analysts surveyed by Bloomberg from Sydney to Chicago on Aug. 31 and Sept. 1 advised buying gold, which rose 0.3 percent last week to $632.60 an ounce in New York. The survey results were the most bullish in seven weeks. Six respondents said to sell. Four were neutral.
Gold gained during every September since 2000 as jewelers stocked up on the precious metal for the winter holidays and speculators in New York and London returned from summer vacations. Mine output has barely budged in the past decade, forcing producers such as Goldcorp Inc. to acquire rivals to expand reserves.
``Our industry is not growing,'' Goldcorp Chief Executive Officer Ian Telfer said in an interview Aug. 31, after the Vancouver-based company agreed to buy Glamis Gold Ltd. for stock valued at $7.88 billion. ``New growth from mines is declining around the world, so you have production flat to down.''
Prices will climb by $200 an ounce to more than $830 in the next two years, and may reach $1,000, Telfer said.
Gold futures for December delivery rose $1.80 an ounce last week on the Comex division of the New York Mercantile Exchange. A majority of analysts surveyed Aug. 24 and Aug. 25 anticipated the gain. The Bloomberg survey has forecast the direction of prices accurately in 76 of 123 weeks, or 62 percent of the time. Prices have gained 42 percent in the past year.
Renewed Interest'
``There has been renewed interest in gold, as evidenced by the Glamis Gold takeover,'' said Thomas Au, principal at R.W. Wentworth & Co., a New York-based consulting company.
Consolidation among mining companies worldwide has been spurred by a five-year rally in gold and soaring exploration costs. Goldcorp, Canada's third-largest producer, made more than $2 billion of acquisitions before its bid for Reno, Nevada-based Glamis. Barrick Gold Corp. bought Placer Dome for $10.4 billion in March to become the world's largest producer.
Annual mine production has been little changed at 2,500 metric tons for the past 10 years, according to GFMS Ltd., a London-based metals researcher.
A rebound in physical demand will be crucial in driving gold prices up for a sixth straight year, some analysts said. Jewelers are the biggest buyers of the metal.
By Pham-Duy Nguyen
Fine precious metal jewelry
Diamonds, gold, silver, platinum, and semi-precious gemstones...