Gold analysts are bearish for a third week, the longest stretch since February 2010, as prices approach $1,200 an ounce and a stronger U.S. economy improves the chance that the Federal Reserve will reduce fiscal stimulus.
Sixteen analysts surveyed by Bloomberg News expect gold to fall next week, 11 are bullish and two neutral. Prices tumbled 26 percent this year, heading for the first annual drop in 13 years and the biggest in more than three decades. Bullion last traded below $1,200 on June 28.
Investors cut holdings in exchange-traded products backed by gold every month this year as prices tumbled, erasing $69.4 billion. Some lost faith in the metal as a store of value as inflation failed to accelerate, while equities and the dollar rallied. This week’s reports of gains in U.S. home sales and manufacturing signaled the Federal Reserve may start easing economic stimulus that helped send gold to a record in 2011.