Gold, little changed today in London, may advance as investors buy the metal to diversify portfolios and preserve their wealth as the global economy sags. The Group of Seven’s finance ministers said after talks in Rome yesterday that a “severe” economic downturn will persist for most of 2009. Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since 1974. Bullion for immediate delivery added 27 cents to $941.97 an ounce at 11 a.m. local time. April futures rose $1, or 0.1 percent, to $943.20 in electronic trading on the Comex division of the New York Mercantile Exchange. The U.S. market is closed today for a holiday. “Gold’s ability to close last week above $930 was encouraging, and given the renewed banking and economic jitters this morning we expect gold to see further inflows,” James Moore, an analyst at TheBullionDesk.com, wrote today in a note. The metal rose to $943 in the morning “fixing” in London, used by some mining companies to sell production, from $935.50 at the afternoon fixing on Feb. 13. Bullion gained 3.3 percent last week and is up 6.8 percent this year. Gold may gain for a second straight week as the banking crisis and recession deepen, according to 26 of 32 traders, investors and analysts surveyed from Tokyo to Chicago last week. Five respondents advised selling and one was neutral. Assets in exchange-traded funds are at all-time highs. Holdings in ETF Securities Ltd.’s Physical Gold fund rose to a record 2.299 million ounces on Feb. 13. Assets in the SPDR Gold Trust, the biggest ETF backed by the metal, expanded to a record 985.86 metric tons as of Feb. 13. Gold reached a six-month high of $952.92 in London the previous day. ‘Consolidation Phase’ The metal may remain in a “consolidation phase” today because of the U.S. holiday and after last week’s gains, London- based broker Marex Financial Ltd. said in a report. “Economic stimulus plans by governments around the world are likely to drive inflation, increasing demand for gold as a hedge,” Marex said. “Governments may continue spending until they see inflation.” U.S. Congress has given final approval to a $787 billion economic stimulus package and Treasury Secretary Timothy Geithner last week pledged as much as $2 trillion in financing for programs aimed at spurring new lending. Hedge-fund managers and other large speculators increased their net-long position by 5 percent in New York gold futures in the week ended Feb. 10, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 163,622 contracts on the Comex. Among other metals for immediate delivery in London, silver was unchanged at $13.69 an ounce. Platinum slipped 75 cents, or 0.1 percent, to $1,063.50 an ounce, and palladium was 0.2 percent lower at $216 an ounce.

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