Gold advanced for a fourth day as investors sought to protect their wealth against the possibility of a global slowdown, with forecasts for a slower expansion in China adding to signs that major economies may be weakening. Immediate-delivery bullion gained as much as 0.3 percent to $1,795.85 an ounce, and traded at $1,795.50 at 2:10 p.m. in Singapore, reversing a loss of 0.4 percent. December-delivery gold rose as much as 0.3 percent to $1,798.70, also overturning a 0.4 percent decline. Morgan Stanley and Deutsche Bank AG cut their forecasts for China’s growth, predicting that weaker expansions in the U.S. and Europe will hurt the country’s exports. In Japan, exports fell more than expected in July, according to data today. “Gold is benefiting from ongoing concerns about sovereign debt and a world slowdown,” said David Thurtell, head of metal research at Citigroup Inc. in Singapore. Futures closed at a record settlement $1,793.80 yesterday as investors sought to hedge against accelerating prices. An index of producer prices in the U.S. gained 0.2 percent last month, compared with a 0.1 percent increase that economists in a Bloomberg News survey were expecting. “We’re looking a little overbought,” said Andrew Gardner, an analyst at MF Global Australia Ltd. in Sydney, referring to the pace of recent gains. “But until the world’s problems, the big issues of the day being U.S. growth and European sovereign debt, are resolved, it’s unlikely to drop much.” India, China Gold futures in India, the world’s biggest bullion consumer, rose to a record 26,568 rupees ($583) per 10 grams on the Multi Commodity Exchange of India Ltd. today. Investment demand in the country jumped 78 percent to 108.5 metric tons in the second quarter, while jewelry demand gained 17 percent to 139.8 tons, the World Gold Council said in a report today. Income growth in India and China has helped “spur that kind of investment,” said Gardner. “In China, the lack of alternative investment vehicles at the moment, and inflation being an issue, so you can see why gold would be popular.” Gold investment demand in China surged 44 percent to 53 tons in the second quarter, while jewelry demand increased 16 percent to 102.9 tons, the council said. Global gold demand fell 17 percent to 919.8 tons in the quarter, it said. Central-Bank Buying Central banks bought 198 tons of gold so far this year, Marcus Grubb, managing director of investment at the World Gold Council, said on Bloomberg Television today. Thailand, South Korea and Kazakhstan added to reserves in July, joining Mexico and Russia in increasing holdings this year as central bankers hedge against depreciating foreign-currency reserves. In Venezuela, President Hugo Chavez ordered the central bank to repatriate $11 billion of gold reserves held in developed nations’ institutions such as the Bank of England. The country, which holds 211 tons of its 365 tons in U.S., European, Canadian and Swiss institutions, will progressively return the bars to the central bank’s vault, Chavez said yesterday. “While overall central banks are probably still net buyers, there’s probably a bit of uncertainty over any response to the European debt crisis, whether or not there could be some selling in the short term to raise cash,” said Gardner. Spot silver was little changed at $40.3175 an ounce, after reaching a two-week high yesterday. Cash palladium gained 0.5 percent to $778.25 an ounce, while platinum was little changed at $1,842.50 an ounce. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net

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