Bloomberg – Gold prices may extend gains for a sixth year in 2006 as hedge funds buy the precious metal to diversify from stocks, bonds and currencies.
The price of bullion may rise 18 percent to average $525 an ounce, up from $445 last year, according to the median forecast of 29 analysts, traders and investors surveyed by Bloomberg News.
Hedge funds and other large speculators more than tripled their net long positions, or bets prices will rise, in New York gold futures in the past five months. Investors are buying the metal because of concern over inflation, the U.S. budget and current account deficits and the dollar.
