Investors are accumulating enough bullion to fill Switzerland's vaults twice over as gold's most-accurate forecasters say the longest rally in at least nine decades has further to go no matter what the economy holds.

Analysts raised their 2011 forecasts more than for any other precious metal the past two months, predicting a 10th annual advance.

The most widely held option on gold futures traded in New York is for US$1500 ($2100) an ounce by December, or 18 per cent more than the record US$1266.50 on June 21.

Holdings through bullion-backed exchange-traded products are already at more than 2075 tonnes, within 0.1 per cent of the all-time high.

"Either a swift economic recovery or further dismal economic performance should bring new buyers into the market," said Eugen Weinberg, an analyst at Commerzbank in Frankfurt who was the most accurate forecaster in the first quarter and expects the metal to rise as high as US$1400 next year.

"A stronger economy would create more jewellery demand. If the economy stays weak or gets worse, then investors will be looking for a safe haven."

Investors added to their gold holdings through ETPs for three consecutive weeks, reflecting demand for assets typically favoured in times of financial stress.

Two-year Treasury yields fell to a record low of 0.4542 per cent on August 24 and the yen reached a 15-year high against the dollar the same day. Pacific Investment Management, Deutsche Bank and Citigroup have announced or are offering funds or traded instruments designed to guard against sudden market declines.

Buyers accumulated almost 278 tonnes of gold in 2010 across 10 ETPs tracked by Bloomberg, worth $10.4 billion at this year's average price. Total holdings are almost twice Switzerland's official reserves of 1040 tonnes, data compiled by the World Gold Council show.

ETP holdings reached a record 2078 tonnes on July 19.

One of the biggest buyers has been Soros Fund Management, which oversees about US$25 billion. George Soros, who made US$1 billion breaking the Bank of England's defence of the £1 in 1992, described gold as "the ultimate asset bubble" at the World Economic Forum's January meeting in Davos, Switzerland. Buying at the start of a bubble is "rational", he said.

Soros Fund Management sold 341,250 shares of the SPDR Gold Trust, the largest ETP backed by bullion, in the second quarter, according to an August 16 Securities and Exchange Commission filing. That still left a holding of 5.24 million shares, equal to almost 16 tonnes.

Gold may rise as high as US$1500 next year, 21 per cent more than the US$1240 traded at 1:45pm in London, according to the median in a Bloomberg survey of 29 analysts, traders and investors.

Dan Brebner, an analyst at Deutsche Bank in London who is the most accurate forecaster so far this year, says the metal may reach US$1550.

Bullion gained 13 per cent since January, beating an 8.4 per cent return on Treasuries, an 8 per cent decline in the MSCI World Index of shares and the 10 per cent slump in the S&P GSCI.

- BLOOMBERG