Gold for immediate delivery advanced, set to rebound from a loss last week, on speculation that demand from China, the world’s second-largest consumer, will increase, while Europe’s debt woes spur haven investment. Immediate-delivery bullion climbed as much as 0.2 percent to $1,376.90 an ounce and was at $1,376.40 at 11:14 a.m. in Seoul. The price has gained 0.5 percent this week after losing 3.6 percent last week, the biggest loss since May 21. Cash palladium has risen 7.5 percent this week, while platinum is 4.2 percent higher, both headed for the biggest gain since Dec. 3. “Overall, underlying demand for bullion remains strong,” Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul, said by phone today. “Chinese buying is seen increasing, and a longer-term trend is still heading upwards.” Some investors purchase bullion as a hedge against inflation, which in China in November was running at the fastest pace in more than two years. The country’s central bank raised interest rates last month. Lion Fund Management Co. has raised more than 3.2 billion yuan ($483 million) for China’s first gold fund to be invested in overseas exchange-traded products, the company said Jan. 11. China should consider increasing its gold reserves given the “record growth” in foreign-exchange reserves, Jin Baisong, a research scholar at the Chinese Academy of International Trade and Economic Cooperation wrote in a commentary published in today’s China Daily newspaper. The academy is affiliated with the Ministry of Commerce. European Bailouts Gold rallied 30 percent in 2010 as central banks in Europe and the U.S. kept borrowing costs low to revive their economies. Gold priced in euros reached a record in December after the European Union and the International Monetary Fund bailed out Greece and Ireland. The euro fell for the first time in five days against the dollar after an IMF official said Europe has yet to allay investor “skepticism” about the sustainability of the region’s debt. The common currency fell 0.2 percent to $1.3340 at 10:32 a.m. in Seoul from $1.3364 yesterday. Seven of 12 traders, analysts and investors surveyed by Bloomberg, or 58 percent, said that the metal will climb next week. Four predicted lower prices and one was neutral. Spot palladium was little changed at $808 an ounce, while platinum gained 0.2 percent to $1,806.75 an ounce. The metals are used in pollution-control devices. Palladium yesterday rose to the highest price since March 2001 as improving prospects for the auto industry boosted demand for the metal. Silver for immediate delivery gained 0.4 percent to $28.8150 an ounce, taking gains this week to 0.5 percent. Gold for February delivery fell 0.8 percent to $1,375.70 an ounce on the Comex in New York.

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