Fifteen analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and five neutral. Gold climbed above $1,300 an ounce on July 17 for the first time in more than three weeks after Bernanke said in testimony to Congress that monthly asset purchases “are by no means on a preset course.” Bullion rose 70 percent from December 2008 through June 2011 as the central bank bought more than $2 trillion of debt.
Gold is heading for the first annual drop in 13 years after some investors lost faith in the metal as a store of value. The Fed chairman said last week the U.S. still needs stimulus, after saying on June 19 that bond buying could slow if the economy improves. Bullion’s plunge to a 34-month low spurred demand for jewelry and coins, and demand from China is “incredibly strong,” Standard Chartered Plc said.
“Bernanke is very mindful of the fact that the recovery can falter quite easily,” said Dan Smith, a commodities analyst at Standard Chartered in London. “Things are going to remain quite volatile. As long as rates don’t go up too much and quantitative easing is eased back slowly, then I don’t see any reason why gold can’t go higher.”
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