Gold, set for a second weekly gain this year, may climb on speculation investors will increase holdings to preserve their wealth amid rising inflation. Gold for immediate delivery swung between a gains and a losses of 0.2 percent before trading at $1,361.25 an ounce at 1:30 p.m. in Singapore, taking this week’s gain to 0.9 percent. Gold for April delivery was little changed at $1,361.60 an ounce on the Comex in New York. “The outlook for gold remains bullish as inflation only gets worse,” said Park Jong Beom, a Seoul-based commodity trader with Tongyang Futures Co. “Investors are buying bullion on dips and the purchase may not be countered by a resurgence in the dollar as long as the U.S. doesn’t take action to raise rates.” China this week joined India, Indonesia, Thailand and South Korea in boosting interest rates as Asian policy makers sought to cool the economies leading a global rebound. The Dollar Index headed for its first weekly advance in a month on speculation inflation will accelerate as the U.S. labor market improves. The “interest rate hike in China shows real concern about inflation,” said Wallace Ng, executive director with ABN Amro Securities Asia Ltd. in Hong Kong. “We expect more buying from China. That should increase local people’s interest in gold purchases as an inflation hedge.” Twelve of 15 traders, investors and analysts surveyed by Bloomberg, or 80 percent, said the metal will rise next week on speculation the Federal Reserve’s plans to maintain near-zero interest rates will spur investment demand. Bullion is down 4 percent this year after its 10th straight annual gain in 2010. While a lower jobless rate gives “some grounds for optimism,” unemployment will take “several years” to return to a “more normal level,” Federal Reserve Chairman Ben S. Bernanke said on Feb. 9. The U.S. needs faster employment growth for a sufficient time before policy makers can be assured the economic recovery has taken hold, he said last week. Platinum for immediate delivery rose 0.3 percent to $1,832.10 an ounce and spot palladium increased 0.2 percent to $823.55 an ounce. Silver decreased 0.5 percent to $30.0587 an ounce. -- Editors: Richard Dobson, Matthew Oakley To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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