(Bloomberg News) Gold traders are the most bullish in nine months after investors' bullion holdings expanded to a record on mounting speculation that central banks will do more to bolster economic growth.

Twenty-nine of 35 analysts surveyed by Bloomberg expect prices to rise next week and three were bearish. A further three were neutral, making the proportion of bulls the highest since Nov. 11. Investors bought 51.7 metric tons valued at $2.78 billion through gold-backed exchange-traded products this month, the most since November, overtaking France as the world's fourth-largest hoard when compared with national reserves.

Data released yesterday showed Chinese manufacturing at its weakest since November, signaling the nation may need more action to rebound from six quarters of slowing growth. European leaders are still struggling to contain the debt crisis. Minutes of the Federal Reserve's most recent meeting showed many policy makers favor more stimulus. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011.

"Additional stimulus is inevitable, the question is how it comes," said Charles Morris, who oversees about $2.5 billion of assets at HSBC Global Asset Management in London. "There's no doubt about it, this is gold's moment. All the long-term trend signals suggest that gold is in a very strong bull market."

Gold's Rally

Gold rose 6.8 percent to $1,669.93 an ounce in London this year, reaching a four-month high yesterday and extending 11 consecutive annual gains. The Standard & Poor's GSCI gauge of 24 commodities advanced 4.6 percent and the MSCI All-Country World Index of equities added 8.2 percent. Treasuries returned 2 percent, a Bank of America Corp. index shows.

Gold ETP holdings overtook France's reserves on Aug. 21 after rising 90.4 tons this year to 2,447.1 tons, data compiled by Bloomberg show. Only the U.S., Germany and Italy hold more, International Monetary Fund data show. The IMF itself holds 2,814 tons of bullion, placing it between Germany and Italy.

Billionaire John Paulson raised his stake in the SPDR Gold Trust, the biggest gold ETP, by 26 percent in the second quarter and George Soros more than doubled his holdings, U.S. Securities and Exchange Commission filings showed Aug. 14. Investors will buy 150 tons through ETPs this year and next, Barclays Plc estimates.

Fed Meeting

Fed policy makers said further action would probably be needed "fairly soon" without evidence of a "substantial and sustainable" improvement in the recovery, according to minutes of the July 31-Aug. 1 meeting released Aug. 22. They next meet Sept. 12-13. Monetary easing can devalue currencies and accelerate inflation, boosting the allure of gold, which generally earns investors returns only through price gains.

Gold closed above its 200-day moving average on Aug. 22 for the first time since March, and that may be a "shot in the arm" for prices to rally toward $1,700, CMC Markets U.K. Plc said in a report that day. The metal held above the measure from the beginning of 2009 through the end of last year, a period in which it reached a record $1,921.15 in September.

Other technical indicators signal the rally could stall. Bullion's 14-day relative-strength index was at 72.3 today, above the level of 70 that indicates to some analysts who study such charts that a drop in prices may be imminent.

Hedge Funds

The increase in prices and ETP holdings has yet to be reflected in speculative wagers in U.S. futures markets. Hedge funds and other money managers cut bets on a rally by 58 percent since the end of February, U.S. Commodity Futures Trading Commission data show. The net-long position fell 4 percent in the week to Aug. 14 and is near the lowest since 2008.