Gold traders split on two year anniversary of peak

NEW YORK (Sept 8)  Gold traders are divided on the outlook for prices next week, weighing signs of an improving US economy against the threat of a military attack on Syria. Two years after bullion set a record, the majority said a new peak won't be reached in the next 24 months.

Thirteen analysts surveyed by Bloomberg expect prices to rise next week, the same number were bearish and five were neutral. Gold slumped 29% since it reached an all time high of USD 1,921.15 an ounce on September 6th 2011. Eighteen people surveyed said the metal won't exceed that level in the next 2 years and 11 predicted another record.

Gold is set for its first decline in 13 years after some investors lost faith in the metal as a store of value. Bullion rallied 16% from a 34 month low in June as the slump stoked demand for jewelry and coins and western nations debated attacking Syria after accusations the government used chemical weapons. An accelerating US economy increased speculation the Federal Reserve will buy fewer bonds to stimulate growth, diminishing demand for gold as a hedge against inflation.

Mr Jonathan Butler a precious metals strategist at Mitsubishi Corporation International (Europe) Plc said that "As long as we're speculating on when any possible military intervention might take place that could be supportive for gold as a safe haven. Fed bond buying will be scaled back in the remainder of this year. If that were to take place there's going to be some downside for gold."