Major Investors have begun a gold buying spree, tightening demand and raising the price of gold three weeks in a row.  The primary reason for the rise in the gold market is  the continuing concerns over the weakness of the dollar causing an upsurge in demand as investors are increasing turning to gold as a hedge against the weakness in the dollar and the economy.

Eighty-three percent of the 30 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on Nov. 30 and Dec. 1 advised buying gold, which rose 2.4 percent last week to $650.60 an ounce in New York. The percentage predicting a gain was the highest since the survey began in April 2004. Three respondents said to sell. Two were neutral.

Gold rallied as the dollar slumped to a 20-month low against the euro.  Speculation that the Federal Reserve may trim borrowing costs next year to boost the economy, as a result of a upcoming US report for the biggest drop in factory orders since July 2000.

Safety in Hard Assets

People are seeking the safety of tangible assets of all sorts,'’ said James Turk, founder of GoldMoney.com, which stores precious metals for investors. “Gold and silver will continue to be driven higher by this money seeking a safe haven from a depreciating dollar.'’

GoldMoney.com, based in Jersey, British Channel Islands, has doubled the amount of gold and silver in storage on behalf of its clients to more than $180 million, up from $78 million on Dec. 31, Turk said. (Source Boolmberg)

Comdex Surges

Gold futures on the Comex division of the New York Mercantile Exchange have climbed 25, as Prices reached a three- month high of $655.50 on Dec. 1.  Silver prices on Comex have jumped 60 percent this year.

Weakening Housing Market Drags on the Economy

Construction spending in October fell by the most in five years, led by a plunge in home building, the U.S. said last week. Fed Chairman Ben S. Bernanke said residential construction is likely to be a drag on economic growth into next year.