Despite growing uncertainty over Fed easing and declining gold exchange traded funds, gold traders are now the most bullish in a month, arguing that the stimulus must flow until the economy recovers.

According to a Bloomberg survey, twelve analysts predict gold prices to rise next week, with nine bearish and eight neutral, the highest proportion of bulls since the end of April, reports Nicholas Larkin for Bloomberg. [Don’t Give Up on Gold ETFs: S&P]

“Gold should still be in demand as an alternative currency,” Daniel Briesemann, a commodities analyst at Commerzbank AG, said in the article. “The quantitative easing by central banks should lead to a depreciation in rates for major currencies and in the end should also lead to some inflation concerns, although this is not an issue at the moment. As long as institutional investors are selling gold ETP holdings, this will probably outweigh robust retail demand.”

Gold futures were 0.7% lower Friday, falling for the third time in four days after the Federal Reserve hinted at scaling back monetary stimulus. However, gold is set for its first weekly gain in three weeks.

Gold-related ETFs dumped 467 metric tons of physical gold holdings valued at around $20.9 billion as investors exited gold positions amid improving economic conditions. The SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have declined about 16.9% year-to-date. [Cashed-Out Gold ETF Investors Face Higher Tax Bill: Report]

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