``We are starting to see not just seasonal buying coming back into the market, but also investors coming back,'' said Jim Lennon, a London-based analyst at Macquarie Bank Ltd. ``We see prices pushing higher.''
Gold has gained every September since 2000 as jewelers buy the metal for the winter holidays, the Indian wedding season and as investors in Europe and U.S. return to work after mid-year breaks. Eighteen of 28 traders, investors and analysts surveyed by Bloomberg on Aug. 31 and Sept. 1 advised buying gold. The results were the most bullish in seven weeks.
Gold for immediate delivery gained $1.74, or 0.3 percent, to $627.20 an ounce at 4:03 p.m. in London. Gold futures didn't trade on the Comex division of the New York Mercantile Exchange today because of the Labor Day holiday.
Jewelers are the biggest buyers of the metal, which has fallen only nine times over the month of September since gold began trading on public exchanges in 1975.
``It's around this time of the year when you expect physical demand to pick up,'' Darren Heathcote, head of trading at Investec Australia, said in an interview from Sydney.
Still, Lennon said investors have a more significant part to play. Gold rose to a 26-year high of $732 an ounce on May 12 as investors poured money into precious metals and other commodities.
``Investors drive 90 percent of the moves,'' said Lennon.
Investor Demand
Pension and hedge funds will put about $100 billion into commodity indexes and related products by the end of 2006, compared with $10 billion at the end of 2003, according to HSBC Holdings Plc.
Silver was up 10 cents, or 0.8 percent, at $13.05 at 4:04 p.m. in London. Investment in Barclays Plc.'s exchange-traded fund, or ETF, for silver rose more than six-fold to 3,121 tons as of Sept. 1, from 653 tons when it was listed on April 28.
``With the strong demand for the ETF, silver should head back to $14, $15,'' said David Gornall, head of bullion and foreign exchange at Natexis Commodity Markets in London.
Among other precious metals, palladium were little changed at $344.25 and platinum rose $3.50, or 0.3 percent, to $1,249 an ounce respectively.
