By Kim Kyoungwha July 8 (Bloomberg) -- Gold climbed on speculation that the precious metal’s drop to the lowest level in almost six weeks is prompting some investors to increase holdings. Immediate-delivery bullion rose 0.2 percent to $1,204.73 an ounce at 1:25 p.m. in Singapore, rising for a second day. The metal fell to $1,185 yesterday, the lowest price since May 24. August-delivery futures climbed 0.5 percent. “The gold market is seeing fresh buying coming in,” said Fujuzawa Nobu, a Singapore-based trader at Standard Bank Group Ltd. People are “still willing to buy,” Nobu said. Gold has weakened 4.7 percent since reaching a record $1,265.30 an ounce on June 21, limiting this year’s advance to 10 percent. The metal is set for a 10th annual gain on concern that Europe’s sovereign debt crisis may hurt the global recovery. “Gold bulls will be heartened that gold was able to close above $1,200 yesterday,” said Ong Yi Ling, an analyst at Phillip Futures Pte. in Singapore. “Some investors may also bet that the corrective decline seen earlier had run its course and start accumulating long positions.” Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,316.48 metric tons yesterday, figures on the company’s website showed. Physical demand from Asia “will escalate at current prices, but market sentiment suggests that gold has further room to the downside,” Edel Tully, a London-based analyst at UBS AG, wrote in a report yesterday. Silver for immediate delivery rose 0.3 percent to $18.0825 an ounce. Platinum was up 0.2 percent at $1,528.45 an ounce, while palladium decreased 0.9 percent to $447.35 an ounce. --Editor: Jake Lloyd-Smith, Ravil Shirodkar To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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