By Glenys Sim Jan. 18 (Bloomberg) -- Gold rebounded as a drop in the dollar and equities prompted investors to seek the precious metal to preserve their wealth. Palladium advanced to an 18- month high, and platinum and silver also gained. Asian stocks extended a U.S. equities slump after JPMorgan Chase & Co. reported a loss in retail banking and U.S. consumer confidence trailed forecasts. The dollar resumed its drop against six-currency basket, falling for the sixth day in seven. “Silver and gold are currently mainly driven by investment demand, and thus react more sensitively to changes in the U.S. dollar,” Stefan Graber, an analyst at Credit Suisse Group AG, wrote in a note today. Immediate-delivery gold gained 0.2 percent to $1,133.40 an ounce at 12:46 p.m. in Singapore. Earlier, it fell 0.3 percent, extending Jan. 15’s decline after the dollar rose against the euro on speculation Greece’s struggle to contain its budget deficit will deter investors from buying the region’s assets. Bullion held by the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, fell for a second day to 1,112.84 tons on Jan. 15, according to the company’s Web site. February-delivery bullion on the Comex division of the New York Mercantile Exchange rose 0.3 percent to $1,133.90 an ounce after dropping as much as 0.3 percent earlier. The metal for June delivery in Shanghai slid as much as 0.9 percent to 249.91 yuan a gram ($1,139 an ounce), before trading 0.5 percent lower at the midday break. Palladium Climbs Palladium rose for a fourth day, heading for the longest rally since the five-day period to Nov. 16, 2009. The rise was driven by speculation demand will increase with the introduction of exchange-traded funds backed by the metal, and physical consumption will grow as the global economy recovers. The metal for immediate delivery climbed by as much as 0.6 percent to $457.75 an ounce, the highest price since July 11, 2008. March-delivery futures in New York gained as much as 1.8 percent to $455.80 an ounce, the highest intraday level since July 15, 2008. “Platinum and palladium are more closely linked to the business cycle than gold and silver due to their heavy use in the car industry,” wrote Graber. Automakers account for about half of demand for platinum, which rose as much as 1.7 percent to $1,626.75 an ounce. “Given that we expect a continued recovery in global economic activity, we still think that platinum and palladium are likely to continue outperforming gold and silver over the coming months,” Graber said. Among other precious metals, silver gained 0.9 percent to $18.5750 an ounce. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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