Gold, trading little changed in Asia, may gain as investors buy the metal to try to protect their wealth from the prospect of slower economic growth and the possibility of declining prices of other assets. Bullion for immediate delivery rose as much as 0.2 percent to $1,186.95 an ounce, and traded at $1,186.05 at 9:55 a.m. in Singapore. Federal Reserve Chairman Ben S. Bernanke said yesterday that the economic outlook remains “unusually uncertain,” with “not a high probability” of deflation. “The knee-jerk reaction to elevated deflation concerns is gold-bearish, as investors are less likely to invest in inflation hedges such as bullion,” HSBC Securities analyst James Steel wrote in a note. Still, “in the longer term, deflationary pressures could be supportive of gold. If deflationary pressures were to intensify, investor demand for quality assets, which include gold, may increase.” The dollar, which usually moves inversely to gold, halted a three-day ascent against a basket of six counterparts as investors sought a refuge from slower growth by selling the currency. The dollar dropped to a seven-month low against the yen today. The gold “market is currently torn between profit-taking by safe-haven investors on the one hand and resuming long-term- oriented investment demand,” Tobias Merath, head of commodity research at Credit Suisse Group AG, wrote in a note. “This fairly bumpy trading behavior could easily extend into August.” Silver for immediate delivery and platinum were little changed at $17.6725 an ounce and $1,517 an ounce, respectively. Palladium gained 0.3 percent to $450 an ounce. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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