July 21 (Bloomberg) -- Gold may gain for a second day in London on speculation the metal’s price decline will boost physical demand and as investors buy commodities. Bullion rebounded yesterday after earlier dropping to an eight-week low of $1,175.55 an ounce, while holdings in the world’s biggest gold-backed exchange-traded fund fell 6.08 metric tons. The metal is trading 5.5 percent below a record $1,265.30 set June 21. European equities gained and the dollar rose against the euro before Federal Reserve Chairman Ben S. Bernanke speaks today on the economy. “There’s been an upturn in physical buying, in Asia particularly,” said Dan Smith, an analyst at Standard Chartered Plc in London. “People see it is a cheap price. There’s been a bit of an improvement in risk appetite and gold can benefit on the back of portfolio flows.” Gold for immediate delivery added $3.08, or 0.3 percent, to $1,195.14 an ounce at 12:18 p.m. in London. Prices earlier fell as much as 0.4 percent. Bullion for August delivery was 0.4 percent higher at $1,196.20 on the Comex in New York. All six industrial metals on the London Metal Exchange rose today, led by copper. Crude-oil futures gained in New York. Assets in the SPDR Gold Trust, the biggest ETF backed by bullion, fell to 1,308.13 tons yesterday, according to the company’s website. Global holdings of the metal by ETFs dropped 6.08 tons from a record to 2,071.97 tons yesterday, according to Bloomberg data from 10 providers. --Editors: John Deane, Dan Weeks. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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