Gold snapped a two-day decline as China’s inflation accelerated in May to the fastest pace since 2008 and Greece’s sovereign-debt crisis worsened, boosting demand for precious metals as a store of value. Silver, platinum and palladium also rallied. Immediate-delivery gold rose as much as 0.4 percent to $1,521.45 an ounce and was at $1,521.10 at 11:58 a.m. in Singapore. Gold for August delivery increased as much as 0.4 percent to $1,522.20 an ounce. China’s consumer prices jumped 5.5 percent last month, the fastest pace in almost three years, the statistics bureau said in Beijing. India’s wholesale inflation grew faster in May than in April, a Bloomberg survey showed ahead of data due later today. Greece was branded with the world’s lowest credit rating by Standard & Poor’s, which said that the nation may default. “Gold is the main beneficiary of rising inflation,” Park Jong Beom, a Seoul-based senior trader with Tongyang Futures Co., said before the Chinese data was released. “Still, the metal’s upward momentum isn’t strong enough to push through the $1,550 level again, which suggests gold may face another round of correction.” The annual gain in consumer prices in China, the world’s largest gold producer, matched the median estimate in a Bloomberg News survey of economists. To try to cap price gains, China has boosted interest rates four times since September, increased banks’ reserve requirements to a record and allowed the yuan to gain about 1.6 percent against the dollar this year. ‘Proving Stickier’ “Price gains are proving stickier than previously thought,” Yao Wei, a Hong Kong-based economist at Societe Generale SA, said before the release. “Any let-up would see a rebound.” Yao sees China’s inflation peaking at 6.5 percent this month. India’s wholesale prices rose 8.74 percent in May from a year earlier, accelerating from April’s 8.66 percent, according to the median of the 22 economists surveyed. Food inflation in the world’s largest gold user rose to an eight-week high last week, adding pressure on the central bank to raise rates. Bullion reached $1,553.65 last week, 1.5 percent less than an all-time high of $1,577.57 touched May 2. Hedge-fund managers and other large speculators raised net-long positions, or bets on higher prices, in New York futures in the week to June 7, according to U.S. Commodity Futures Trading Commission data. “Investor interest in gold is growing, which together with physical demand from Asia, should keep gold well supported,” Marc Ground, an analyst at Standard Bank Plc, wrote in a note. “We continue to advocate buying on dips.” In Greece, the government, which plans to sell 1.25 billion euros ($1.8 billion) of 26-week Treasury bills today, said that the downgrade overlooked talks between European officials to address the nation’s financing needs. “Greece will default -- it’s a question of when, rather than if,” said Vincent Truglia, managing director at New York- based Granite Springs Asset Management LLP in New York. “Only a debt writedown will do.” Spot silver gained as much as 1 percent to $35.14 an ounce and last traded at $35.0950. Immediate-delivery palladium strengthened 0.9 percent to $801.63 an ounce, while platinum added 0.5 percent to $1,807 an ounce. 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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