Gold may top $2,000 an ounce by year-end amid surging investor demand

Gold will probably top $2,000 an ounce by year-end amid surging investor demand, a Bloomberg survey showed.

Prices will rise to a peak of $2,038 before Dec. 31, based on the average of 16 respondents in a Bloomberg survey at the LondonBullion Market Association’s annual conference in Montreal. Next year, gold will rally as high as $2,268, according to the average in the survey.

Gold has surged 25 percent this year, touching a record $1,923.70 inNew York on Sept. 6. The metal climbed as escalating debt woes inEurope and the prospect of faltering U.S. growth boosted demand. Today, gold futures for December delivery advanced $4.80, or 0.3 percent, to $1,783.70 at 9:13 a.m. on the Comex in New York.

“This is largely a crisis of confidence, and gold is a safe haven,” Rujan Panjwani, the president of Edelweiss Financial Services Ltd., said in an interview at the conference. “I see little chance of gold falling.”

Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. Holdings in exchange-traded funds backed by the metal have jumped 31 percent in the past two years, reaching a record 2,260.5 metric tons on Aug. 8.

The Federal Reserve has kept U.S. borrowing costs at a record low near zero percent and conducted two rounds of asset purchases, or so-called quantitative easing, in a bid to boost growth. Greek Prime Minister George Papandreou’s government will hold another call with its main creditors after a “productive” round of talks aimed at staving off default.

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Posted by VBN on Sep 21 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry