MELBOURNE: Gold rose to the highest level in a week as China's inflation cooled and before a report that may show an increase in U.S. jobless claims, boosting optimism that central banks may take steps to bolster the global economy.
Gold for immediate delivery gained as much as 0.4 % to $1,618.80 an ounce, the highest since July 31, and traded at $1,615.89 at 1:39 p.m. in Singapore. December-delivery gold rose as much as 0.3 % to $1,620.30 on the Comex.
Consumer prices rose 1.8 % from a year earlier, the lowest rate since January 2010, while producer prices fell 2.9 %, the fifth straight drop, said the National Bureau of Statistics. That may encourage policy makers to introduce more stimulus measures. Weekly U.S. jobless claims rose to 370,000 from 365,000, according to a Bloomberg News survey of economists before the Labor Department issues the figure today.
"There is still QE thinking in the background of gold prices and it won't go away until we see the U.S. in full recovery mode," said David Lennox, a resource analyst at Fat Prophets in Sydney, referring to quantitative easing. "That's certainly not happening at the moment."
The Federal Reserve said Aug. 1 it will add stimulus if necessary to boost growth and cut an unemployment rate that has been 8 % or higher for more than three years.
Holdings in exchange-traded products backed by gold gained 0.3 % to 2,411.721 metric tons yesterday, the highest since July 6, according to data compiled by Bloomberg.
Separate reports today showed Chinese retail sales slipped and industrial production in the world's second-largest economy grew less 10 % for a fourth month, a level not seen since the 2009 financial crisis.
Spot silver gained as much as 0.6 % to $28.205 an ounce and was at $28.1925. Platinum for immediate delivery climbed as much as 0.7 % to $1,418.75 an ounce, the highest since Aug. 3, and traded at $1,414.75. Palladium rose 0.3 % to $588.75 an ounce. (Bloomberg/msw)
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