Gold May Rise on Demand for Metal as Hedge Against a Recession (Source: Bloomberg)

By Pham-Duy Nguyen

Jan. 21, 2008 (Bloomberg) -- Gold may rise, resuming this year's rally, on speculation a U.S. recession will boost demand for the precious metal as an alternative investment.

Fourteen of 27 traders, investors and analysts surveyed by Bloomberg from Mumbai to New York on Jan. 17 and Jan. 18 advised buying gold, which fell 1.8 percent last week to close at $881.70 in New York. Eleven said to sell, and two were neutral.

Gold has rallied 5.2 percent this year, reaching a record $916.10 on Jan. 15, as the Standard & Poor's 500 Index has fallen 9.8 percent.

Gold's decline last week, the first since mid-December, surprised the majority of analysts who had expected a gain when surveyed Jan. 10 and Jan. 11. The survey has accurately forecast prices in 120 of 194 weeks, or 62 percent.

This week's survey results: Bullish: 14 Bearish: 11 Neutral: 2

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at .
Last Updated: January 20, 2008 12:05 EST

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