Gold traded little changed in London, reversing earlier losses, after China cut benchmark interest rates for the first time since July 2012. China’s one-year deposit rate was lowered by 0.25 percentage point to 2.75 percent, while the one-year lending rate was reduced by 0.4 percentage point to 5.6 percent, effective tomorrow, the People’s Bank of China said on its website today. “The Federal Reserve has the most impact across the central banks but regardless of which central bank you are talking about, an accommodative policy is generally friendly to gold,� Joni Teves, a precious metals analyst at UBS AG in London, said by phone. Gold for immediate delivery was little changed at $1,195.01 an ounce by 12:02 p.m. in London, according to Bloomberg generic pricing. Gold for December delivery climbed 0.3 percent to $1,194.40 on the Comex in New York. Gold had fallen earlier today as European Central Bank President Mario Draghi said the ECB may broaden its asset-purchase program to accelerate inflation. Though inflation risks tend to benefit gold, which is often regarded as a hedge against rising prices, his comments weakened the euro against the U.S. dollar. A stronger greenback typically cuts demand for the precious metal. Futures trading volume on the Comex was 74 percent above the 100-day average for this time of day, data compiled by Bloomberg show. Inflation Expectations Looser Chinese monetary policy benefits gold by stoking inflation expectations and by reducing the opportunity cost of holding the metal, given yields are lower, and by spurring growth, said Teves. “China’s gross domestic product in recent years has coincided with growth in demand for gold in China,� said Teves. “As people become richer, they have more disposable income but don’t have a lot of investment options, so gold is an attractive asset to hold.� While Russia boosted gold reserves last month, Ukraine cut holdings by about 35 percent to 26.1 metric tons, the lowest since 2008, International Monetary Fund data show. Kazakhstan, Azerbaijan, Belarus and Mauritius added gold to reserves in October, IMF data show. Holdings in gold-backed exchange-traded products fell 2.1 tons to 1,614.7 tons yesterday, remaining at the lowest in more than five years, data compiled by Bloomberg show. Silver for immediate delivery gained 0.2 percent to $16.3011 an ounce in London. Palladium rose 1.3 percent to $781.50 an ounce. Platinum added 0.8 percent to $1,222.62 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net John Deane, Nicholas Larkin

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