Rallies in price of gold to continue

GOLD may climb the most in more than three decades this year as investors and central banks boost their holdings on concern that global economic growth may stall amid a worsening sovereign-debt crisis in the US and Europe.

Gold for immediate delivery may reach $2,000 (€1,392) an ounce by the year end, extending this year’s gain to 41%, according to the median forecast in a Bloomberg survey of 13 traders and analysts at a conference in Kovalam in South India. That would be the most since the 127% surge in 1979, according to Bloom- berg data.

The metal is set for an 11th straight year of gains as holdings in exchange-traded products reached a record on August 8 and central banks are adding to their reserves for the first time in a generation.

George Soros, the billionaire investor, cut his holdings in the SPDR Gold Trust this year as prices rallied, while billionaire John Paulson maintained the largest stake, according to regulatory filings last week.

“The economic data, debt problems, balance sheet problems are all deep-rooted and will take years to work out of the system and that is why we are still bullish on the trend in gold,” said Paul Walker, global head of precious metals at industry researcher GFMS.

Gold for immediate delivery hit a record $1,894.80 an ounce yesterday.