Gold may gain for a second day in London as concern about Europe’s sovereign-debt crisis and slowing economic growth spur demand for the metal as an alternative investment. European Central Bank President Jean-Claude Trichet rejected any direct ECB participation in a second bailout for Greece, escalating a clash with governments as they rush to craft a solution involving investors. The U.S. Federal Reserve this week said the economy expanded at a “steady pace” in most of the country while slowing in four of 12 regions, underscoring Chairman Ben S. Bernanke’s statement that record stimulus should be maintained to bolster a “frustratingly slow” recovery. Gold will be “supported if the European debt crisis stumbles along without a solid solution,” Edel Tully, a London- based analyst at UBS AG, said today in a report. “Weakness in global data is fostering more optimism on gold in the second half. There’s the threat that real interest rates might remain entrenched in negative territory across many regions.” Immediate-delivery gold fell 80 cents to $1,543.30 an ounce by 10:15 a.m. in London. The metal is little changed this week. Gold for August delivery was up 0.1 percent at $1,544.50 an ounce on the Comex in New York. Trichet signaled yesterday that the ECB will press ahead with another interest-rate increase next month to tame euro-area inflation, even as Greece remains on the brink of default. The costs of insuring against default on government debt sold by Greece, Portugal and Ireland have surged to records, according to traders of credit-default swaps. British Pounds Record Gold is up 8.6 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. Europe’s debt crisis helped bullion reach a record $1,577.57 on May 2. The metal touched an all-time high of 950.81 British pounds today. “We shall recommend buying gold in euro, sterling and yen terms immediately,” economist Dennis Gartman wrote in his Suffolk, Virginia-based Gartman Letter. “We are about to turn violently bullish of the dollar,” said Gartman, adding that he is buying gold primarily in euros and pounds today. UBS raised its three-month gold forecast to $1,600 from $1,400, while cutting its one-month forecast to $1,475 from $1,500. There may be a “pullback over the summer months,” though any drops “will be short-lived,” Tully said. Silver for immediate delivery was little changed at $37.56 an ounce in London. Palladium rose 0.2 percent to $818.25 an ounce after reaching $819.38, matching yesterday’s three-month high. Platinum was little changed at $1,840.75 an ounce after climbing to a five-week high of $1,849.25. 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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