Gold for immediate delivery rallied after dropping the most in more than a year yesterday. Bullion increased as much as 0.5 percent to $1,837.85 an ounce and traded at $1,836.18 an ounce at 7:47 a.m. Singapore time. The metal jumped to a record $1,913.50 yesterday on speculation that Federal Reserve Chairman Ben S. Bernanke will signal further measures to stimulate the U.S. economy later this week and as debt crises spurred demand for haven assets. “Gold looks very bubbly,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview yesterday. “Gold’s going to continue to suck everybody in. There’s too much risk of a wicked correction lurking around the corner to enter the trade right now.” Spot gold dropped 3.7 percent yesterday, the most since February 2010. Today, futures for December delivery fell 1.2 percent to $1,838.90 an ounce, extending yesterday’s slide. Before yesterday, prices surged 17 percent in three weeks. The metal is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify their holdings away from equities and some currencies. Bullion also reached all-time highs in euros, British pounds and Swiss francs. “A little stability in the stock market triggered this trailing stop liquidation,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago yesterday. The Standard & Poor’s 500 Index rose 3.4 percent. Holdings in bullion-backed exchange-traded products fell for a third day, sliding 24.8 metric tons to 2,181.6 tons, data compiled by Bloomberg show. Assets reached a record 2,216.8 tons on Aug. 8. UBS AG raised its one-month gold forecast to $1,950 from $1,725 and increased its three-month outlook to $2,100 from $1,850. Bernanke is speaking Aug. 26 in Jackson Hole, Wyoming, at an annual conference sponsored by the Fed Bank of Kansas City. “In the long-term, gold is attractive,” Zeman of Kingsview said. “Fiscal deficits are completely out of control. It’s no wonder that investors are losing faith in paper money.” To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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