May 29 (Bloomberg) -- Sugar, nickel and zinc prices may gain 11 percent over the next three months, leading a commodities rally that has more potential after a ``long period of underinvestment,'' Barclays Capital said in a quarterly report.

Raw sugar may rise to 18 cents a pound by the end of August from 16.2 cents on May 25, London-based Barclays said in the May 26 report. The prices of nickel and zinc may also climb 11 percent to $25,000 a metric ton and $4,000 a ton respectively. Natural gas and soybeans have the most to lose, the report added.

The Reuters/Jefferies CRB index of 19 energy, metals and agriculture items soared 82 percent since the end of 2001, and reached a record on May 11 as economic growth in China and India has spurred demand for raw materials. Some analysts such as John Tumazos of Prudential Equity Group say metals are overpriced and reflect speculation.

``We do not see higher commodities prices as speculative bubbles, but rather as a result of a long period of underinvestment accompanied by supportive structural changes on both the supply and demand sides,'' Barclays analysts including George Hopley in New York and Paul Horsnell in London said.

Sugar will benefit from increased demand to make ethanol as an alternative motor fuel in Brazil, Barclays said. Sugar prices have climbed 82 percent in the past year.

Copper for immediate delivery will average $8,200 a ton in the third quarter and go as high as $9,000 in the next three months, Barclays said. The metal used in wire and pipes closed last week at $8,364 a ton.

Base Metals

``The outlook for base metals appears positive, with copper and zinc in particular continuing their long cycle upwards,'' Barclays said.

Gold will average $705 an ounce in July to September and trade at $700 at the end of August, according to the report. Gold closed at $653.70 an ounce on Friday.

Natural gas may drop 16 percent to as low as $5 per million British thermal units in the next three months, from $5.975 on May 25, Barclays said. Soybeans may fall 0.7 percent to $5.80 a bushel, according to the report.