Russia and Kazakhstan expanded gold reserves for a fourth straight month in January, while Azerbaijan acquired bullion for the first time in more than three years, as central banks sought to diversify their assets.
Billionaire investors George Soros and Louis Moore Bacon cut their stakes in exchange-traded products backed by gold last quarter as futures dropped the most in more than eight years. John Paulson maintained his holding.
Speculators increased their bullish commodity wagers for a third straight week before prices capped the biggest January rally since 2006 on signs that the global recovery will be sustained by central bank stimulus.
Danske Bank A/S and Credit Suisse Group AG, the most-accurate gold forecasters, say prices will probably peak this year while their nearest rival, UniCredit SpA, sees no end in sight to the 12-year bull market.
Gold will rally this year and into 2014 as U.S. Federal Reserve policy makers will probably maintain asset purchases for two more years to buttress the recovery of the largest economy, according to Morgan Stanley.
Gold may climb as high as $1,630 an ounce next year as investors seek protection from financial turmoil in Europe and the U.S. and as Chinese demand rises, according to Tom Kendall, the most accurate forecaster for 2010.
Gold may climb over the next three months as U.S. lawmakers attempt to tackle the country’s debt ceiling and the world’s largest economy slows, Goldman Sachs Group Inc. said, advising investors to place bets on advances.
Demand for palladium, last quarter’s best-performing precious metal, is exceeding supply for a second consecutive year as mine production stagnates while sales by automakers, the biggest buyers, reach record highs.