Gold rebounded from a three-week low as a rally in equities boosted demand for the metal as a hedge against inflation. The MSCI All-Country World Index and the Standard & Poor’s 500 Index gained as much as 1.4 percent after reports showed Chinese industrial output and U.S. retail sales topped economists’ estimates. Before today, gold slumped 2 percent in the past week, dropping yesterday to $1,511.40 an ounce, the lowest since May 23. “Gold is embracing the inflationary discussion,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “The huge rally in the S&P gave gold the risk-on attitude that it so dearly needed. Gold is acting more as a reflection of the growth element in the economy.” Gold futures for August delivery rose $7.20, or 0.5 percent, to $1,522.80 at 11:22 a.m. on the Comex in New York. The precious metal has advanced 7.2 percent this year, reaching a record $1,577.40 on May 2. Silver futures for July delivery rose 41.8 cents, or 1.2 percent, to $35.155 an ounce on the Comex. Before today, the price gained 91 percent in the past 12 months. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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