Gold May Gain for Third Straight Week as Dollar Rally Stalls

By Pham-Duy Nguyen

Nov. 17 (Bloomberg) -- Gold may gain for the third straight week on speculation the dollar's rally will stall, boosting the appeal of the precious metal as an alternative investment.

Eleven of 23 traders, investors and analysts surveyed from Mumbai to Chicago on Nov. 13 and Nov. 14 advised buying gold, which rose 1.1 percent last week to $742.50 an ounce in New York. Six said to sell, and six were neutral.

In October, gold plunged 18 percent, the most since March 1980, as the dollar rose 7.8 percent against a weighted basket of six major currencies. Gold is priced in dollars and often moves inversely to the currency.

Most analysts surveyed on Nov. 6 and Nov. 7 anticipated gold's gains last week. The survey has forecast prices accurately in 141 of 237 weeks, or 59 percent of the time.

Last week's survey results: Bullish: 11 Bearish: 6 Neutral: 6

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Last Updated: November 16, 2008 14:00 EST