Gold set to advance on sustained demand

New York: Gold may gain as physical purchases increase and as investors buy the metal as a means of protecting wealth, a survey found.

Twelve of 27 traders, investors and analysts surveyed by Bloomberg, or 44 per cent, said bullion will rise this week.

Seven forecast lower prices and eight were neutral. Gold for delivery in August was up 0.8 per cent last week at $1,197.40 (Dh4,395) an ounce on the Comex in New York.

The metal has dropped 5.5 per cent since climbing to a record $1,266.50 on June 21.

Stress-test results on European banks were released Friday, indicating whether banks can survive potential losses on sovereign-debt holdings. Seven banks failed the tests.

Federal Reserve Chairman Ben Bernanke said last week that the econ-omic outlook remains "unusually uncertain."

Uptrend intact

"[The] bullish longer-term uptrend is still intact and prices are supported by physical buyers," said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland.

"Gold also serves the principal motive of long-term wealth preservation."