Gold gained for a third day as interest-rate increases spurred concern that the global economy may slow and as the European sovereign debt crisis increased demand for the metal as a haven. Gold for immediate delivery advanced 0.3 percent to $1,532.85 an ounce at 1:36 p.m. in Singapore. The August- delivery contract was 0.3 percent higher at $1,533.20 an ounce, also up for a third day. China raised its benchmark interest rates yesterday for the fifth time since October to tame inflation which accelerated to the fastest pace since July 2008. The People’s Bank of China raised benchmark deposit and lending rates by 25 basis points, effective from today. “The fact they keep raising rates is generating talk of a slowdown, which ultimately adds to concerns in the market of a global slowdown in economic activity,” said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. “Gold is again benefitting from that.” The European Central Bank will also raise interest rates today, increasing the benchmark by 25 basis points to 1.5 percent, when council members meet in Frankfurt, according to all 55 economist forecasts in a Bloomberg News survey. Sovereign Debt Concern over Europe’s sovereign debt crisis may also buoy prices after Moody’s Investors Service cut Portugal to Ba2 from Baa1 on July 5, making it the second euro-region country with a non-investment-grade rating, Heathcote said. European finance ministers last week authorized an 8.7 billion-euro loan payout to Greece, basing a second rescue package on talks designed to ensure that banks hold onto their Greek debt holdings. “There are a lot of factors at play that seem to suggest gold is well supported,” Heathcote said. Silver for September delivery jumped 0.9 percent to $36.24 an ounce, after a 1.4 percent gain yesterday. The metal for immediate delivery advanced 1 percent to $36.235 an ounce. Spot palladium added 0.7 percent to $774 an ounce, while cash platinum increased 0.2 percent to $1,728.60 an ounce. To contact the reporter for this story: Phoebe Sedgman in Wellington at psedgman2@bloomberg.net. To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net.

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