Gold may rebound from the biggest decline in seven weeks as the prospect of sustained low interest rates in the U.S. and Europe’s sovereign-debt crisis spur demand for the metal as an alternative investment. Policy makers decided to keep the Federal Reserve’s balance sheet at a record to spur the economy after completing $600 billion of bond purchases this month and repeated they will keep borrowing costs low “for an extended period.” Gold slid 1.8 percent yesterday as oil drove commodities lower. The metal on June 22 climbed within 1.3 percent of a record set last month as Greece tries to avert a default. “The Fed turning hawkish would still weigh on gold prices, but for now it is a very distant concern,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. “Sour global risk sentiment as well as ongoing economic uncertainty will in our view also help to support prices.” Immediate-delivery gold rose $1.30, or 0.1 percent, to $1,522.70 an ounce by 9:53 a.m. in London. The metal is down 1.1 percent this week. Gold for August delivery was up 0.2 percent at $1,523.10 an ounce on the Comex in New York. Yesterday’s decline pushed bullion below its 50-day moving average, currently at $1,521.14, for the first time since February. Some analysts and investors study charts of trading patterns and prices to predict changes in a commodity. Gold is up 7.2 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. Europe’s debt crisis helped bullion reach a record $1,577.57 on May 2. Twelve of 16 traders, investors and analysts surveyed by Bloomberg, or 75 percent, said bullion will rise next week. Two predicted lower prices and two were neutral. Aid Payment Conditions European finance chiefs will decide on July 3 whether Greece has met conditions for its next aid payment. European Union leaders urged the nation to pass a package of budget cuts and vowed to do what’s needed to meet the country’s financing needs, they said in a statement in Brussels yesterday. Greek lawmakers must approve the 78 billion-euro ($111.4 million) package in a vote next week, a condition for receiving a fifth loan payment under an existing bailout and for future financing. Failure to secure aid would push Greece to the brink of default, with the country needing the funds to cover 6.6 billion euros of maturing bonds in August. “We’ve seen a huge move, expect a bounce,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “Is the world a safer place than it was yesterday? Marginally, but we’ve still got a lot of hurdles to jump.” Silver for immediate delivery fell 0.3 percent to $35.205 an ounce in London. Holdings of the metal in exchange-traded products rebounded from a nine-month low, gaining 24.3 metric tons to 13,484.5 tons, according to data compiled by Bloomberg. Palladium declined 0.2 percent to $745.50 an ounce. Platinum was little changed at $1,703 an ounce after yesterday dropping to a three-month low of $1,685.10. To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Phoebe Sedgman in Wellington at psedgman2@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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