(Bloomberg News) -- Gold is poised to complete its 11th consecutive annual gain, the longest winning streak in at least nine decades, on the brink of a bear market.

George Soros, the billionaire who two years ago called it the "ultimate asset bubble," cut 99 percent of his holdings in the first quarter, Securities and Exchange Commission data show. Hedge fund managers John Paulson, Paul Touradji and Eric Mindich also sold bullion this year. While speculators in New York futures are the least bullish in 31 months, the median estimate in a Bloomberg survey of 44 traders and analysts is for prices to rally as much as 39 percent to $2,140 an ounce in 2012.

The divergence of views is widening after prices declined 19 percent from a record close of $1,900.23 on Sept. 5, or 1 percentage point away from a bear market. As some investors retreated to cash amid a $10 trillion slump in global equity values since May, others bought more metal, taking holdings in exchange-traded products to an all-time high two weeks ago. Bullion's 8.1 percent gain in 2011 means it's on track to beat stocks, bonds and the dollar for a second straight year.

"It's done its job this year of protecting investors," said Michael Cuggino, 48, who helps manage about $15 billion of assets, including $3 billion in gold, at Permanent Portfolio Funds in San Francisco and correctly predicted in February that prices would keep rising. "Gold has been all over the place. If you bought gold at $1,800 then you aren't too happy. Some people will get out of gold, but the longer-term investors will remain."

Trading Partners

Bullion was at $1,535.09 at 5:22 p.m. in London, below this year's average of $1,572.47 and six times more than when the bull market began in 2001. The MSCI All-Country World Index of equities declined 9.9 percent, on track for the worst year since 2008, and the Dollar Index, a measure against six major trading partners, advanced 1.9 percent. Fixed-income securities around the world gained 4.3 percent this year, the weakest performance since 2007, Bank of America Corp. indexes show.

Investment in physical metal is cooling. The U.S. Mint's sales of American Eagle gold coins in November were the weakest since June 2008, data on its web site show. Holdings in bullion- backed ETPs fell about 35 metric tons since reaching a record on Dec. 14, according to data compiled by Bloomberg. They are still 140 tons higher than at the start of 2011 and the total of 2,326 tons, valued at about $116 billion, exceeds the reserves of all but four central banks. ETP holdings climbed 0.3 percent yesterday, the first increase in two weeks.

Demand had strengthened most of this year as Europe's debt crisis widened and the Federal Reserve pledged to keep interest rates near zero until at least mid-2013. The European Central Bank cut rates to 1 percent on Dec. 8, matching the record low of the euro era that began in 1999. That increases the appeal of bullion because it generally earns investors returns only through price gains.

"The longer-term trends, mainly government fiscal and monetary policies, haven't changed," said Tom Winmill, who helps manage more than $200 million of assets from Walpole, New Hampshire, for Midas Funds and whose Midas Perpetual Portfolio may increase its 19 percent investment in bullion and gold mining companies in the next quarter. "Gold has that preservation-of-wealth role and was probably used quite a bit in the last several weeks."

Options traders are also bullish, with the top nine holdings all betting on higher prices. The two most widely held contracts give holders the right to buy gold at $2,000 by the end of March and May, data from the Comex exchange show.