Gold futures topped $1,700 an ounce for the first time since March on speculation that a sluggish global economy will spur central bankers to boost monetary stimulus, increasing demand for the metal as an inflation hedge. In August, a U.S. factory index showed contraction for the third straight month, and manufacturing in the euro area shrank more than estimated, suggesting the region’s economy may struggle to avoid a recession in the third quarter. Last month, gold’s jumped 4.5 percent, the most since January. “Bad economic news is good for gold,� Pratik Sharma, a fund manager at Miami-based Atyant Capital, said in a telephone interview. “People are getting additional confirmation that central banks are ready to unleash more stimulus measures.� Gold futures for December delivery gained 0.5 percent from Aug. 31 to settle at $1,696 at 1:36 p.m. on the Comex in New York. Earlier, the price reached $1,701.60, the highest for a most-active contract since March 13. Floor trading was closed yesterday for a U.S. holiday. Federal Reserve Chairman Ben S. Bernanke said on Aug. 31 that the U.S. central bank will provide additional stimulus as needed. The European Central Bank may reveal details of a plan to buy bonds of debt-saddled nations when officials meet on Sept. 6. Gold surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. Silver futures for December delivery rose 3.1 percent to $32.411 an ounce on the Comex, after reaching $32.435, the highest since April 13. On the New York Mercantile Exchange, platinum futures for October delivery advanced 2 percent to $1,567.50 an ounce. Palladium futures for December delivery gained 1.9 percent to $641.45 an ounce. To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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