By Aya Takada Nov. 16 (Bloomberg) -- Rubber rebounded after data showed Japan’s economy expanded more than projected, boosting investor confidence that an economic recovery will increase demand for the commodity used in tires. Prices in Tokyo rose as much as 1.3 percent, extending last week’s 2.1 percent gain. Rubber futures also advanced as a weaker dollar pushed gold to a record, stoking speculation investor demand for commodities will grow, said Takaki Shigemoto, a commodity analyst at research and investment company JSC Corp. in Tokyo. “The strong economic data spurred investors to increase holdings of risky assets, leading to a rally in gold and other commodities,” Shigemoto said today by phone. April-delivery rubber climbed as much as 3.1 yen to 238.3 yen a kilogram ($2,661 a metric ton) on the Tokyo Commodity Exchange before trading at 237.5 yen at 11:33 a.m. local time. Japan’s economy grew at an annual 4.8 percent pace in the third quarter, the second straight expansion. Gross domestic product accelerated from a revised 2.7 percent expansion in the three months ended June 30, the Cabinet Office said today in Tokyo. The median estimate of 20 economists surveyed by Bloomberg News was for 2.9 percent. “The GDP data were much stronger than expected, boosting risk appetite,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA. Gold Record Gold advanced to a record $1,126.07 an ounce as a weaker dollar increased the investment appeal of the metal. The dollar fell for a second day against a basket of six major currencies as Japan’s GDP data prompted investors to sell the dollar for higher-yielding currencies. Rubber on the Shanghai Futures Exchange gained as much as 1.7 percent to 20,990 yuan ($3,074) a ton, the highest level for the most-active contract since September 2008. The March- delivery contract traded at 20,780 yuan at 9:55 a.m. local time. The market extended gains after data last week indicated that China’s economic expansion accelerated, boosting speculation demand will increase in the world’s largest consumer of natural rubber, Shigemoto said. China’s industrial production rose 16.1 percent from a year before, the most since March 2008, the statistics bureau said in Beijing Nov. 11. The Shanghai exchange reported Nov. 13 that natural rubber stockpiles monitored by the bourse rose 9,170 tons to 129,867 tons, the highest level since November 2004. To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net

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