Gold may gain for a third day after China raised interest rates, boosting concern that global economic growth will slow, and as Europe’s debt problems increase demand for the metal as an alternative investment. Gold for immediate delivery was little changed at $1,527.80 an ounce at 9:28 a.m. in Singapore. The August-delivery contract was almost unchanged at $1,528.10 an ounce, after advancing 1.1 percent yesterday. China raised its benchmark interest rates yesterday for the fifth time since October to tame inflation which likely accelerated last month to the fastest pace since July 2008. The People’s Bank of China raised benchmark deposit and lending rates by 25 basis points, effective from today. “The fact they keep raising rates is generating talks of a slowdown, which ultimately adds to concerns in the market of a global slowdown in economic activity,” said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. “Gold is again benefitting from that.” Concerns about Europe’s sovereign debt may also buoy gold prices after Moody’s Investors Service cut Portugal to Ba2 from Baa1 on July 5, making it the second euro-region country with a non-investment-grade rating, Heathcote said. European finance ministers last week authorized an 8.7 billion-euro loan payout to Greece, basing a second rescue package on talks designed to ensure that banks keep their Greek debt holdings. “That’s helped give gold a boost,” he said. “There are a lot of factors at play that seem to suggest gold is well supported.” Silver for September delivery gained 0.4 percent to $36.045 an ounce, after a 1.4 percent gain yesterday. The metal for immediate delivery advanced 0.4 percent to $36.0362 an ounce. Spot palladium jumped 0.6 percent to $772.75 an ounce while cash platinum increased 0.5 percent to $1,733.13 an ounce. To contact the reporter for this story: Phoebe Sedgman in Wellington at psedgman2@bloomberg.net. To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net.

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