Gold rose in London as investors increased commodity holdings on speculation the worst of the global recession is over. The Reuters/Jefferies CRB Index of 19 raw materials yesterday reached the highest level in almost four months as economic data in the U.S. and China improved. Federal Reserve Chairman Ben S. Bernanke said yesterday the economic contraction may be slowing and that the housing market had “shown some signs of bottoming” after a three-year slump. “There’s a general buying of commodities, including gold, that’s offsetting the usual safe-haven buying trend,” Standard Chartered Plc analyst Dan Smith said today by phone from London. “Funds are generally looking to increase their exposure to commodities.” Bullion for immediate delivery gained as much as $8.65, or 1 percent, to $905.80 an ounce and traded at $904.28 by 11:54 a.m. local time. June futures were little changed at $905 in electronic trading on the New York Mercantile Exchange’s Comex division. The metal fell to $903.50 in the morning “fixing” in London, used by some mining companies to sell production, from $910 at yesterday’s afternoon fixing. Spot prices yesterday touched $916.09, the highest since April 27. U.S. regulators will say Bank of America Corp. needs $34 billion in new capital, people familiar with the matter said, potentially boosting the metal’s haven appeal. The Fed’s stress- test results, to be released tomorrow, may show about 10 banks need new capital, the people said. Central Bank Meetings “It’s a thin market” today, said Bernard Sin, head of currency and metals trading at Swiss refiner MKS Finance SA, by telephone from Geneva. “A lot of people are on the sidelines looking to the European Central Bank and Bank of England” meetings tomorrow, he said. The ECB will probably reduce its key interest rate by a quarter percentage point tomorrow to a record low of 1 percent, according to a Bloomberg survey of economists. The BOE will likely leave its rate at 0.5 percent and will assess whether to spend the final tranche of 75 billion pounds ($113 billion) of newly printed money in U.K. debt markets. The precious metal may drop 15 percent in the next several months, RBC Capital Markets analyst Michael Curran said in a note yesterday. Jewelry manufacturers are typically “not very active” in the Northern Hemisphere’s summer months, he said. Commodity Assets Gold in ETF Securities Ltd.’s exchange-traded commodities gained 0.9 percent since April 30 to 7.468 million ounces yesterday, according to the company’s Web site. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, has remained at 1,104.45 metric tons since April 23. New investments in commodity assets totaled $22 billion in the first quarter, of which commodity exchange traded products totaled $17 billion, Barclays Capital said in a report last week. Among other metals for immediate delivery in London, silver added 0.8 percent to $13.445 an ounce. Platinum lost 0.2 percent to $1,132.50 an ounce, and palladium rose 1.5 percent to $223.25 an ounce. “The recent platinum strength, which we believe has been driven by investment buying, could be reversed in the near term,” Investec Securities wrote in a report today. The metal will average $1,060 an ounce this year, it said. Silver investment in ETF Securities’ ETCs rose 1.1 percent since April 30 to 18.284 million ounces. Platinum and palladium holdings were little changed.

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