Gold rose for the first time in three days in London on signs of increasing physical demand from India and China, the world’s largest consumers. Gold imports by China from Hong Kong more than doubled to an all-time high in March, Hong Kong government data showed yesterday. India’s purchases are set to exceed 100 metric tons for a second month in May as jewelers rush to beat central bank curbs on imports by banks, according to Rajesh Khosla, managing director of MMTC-PAMP India Pvt. Gold has rebounded about 10 percent since reaching a two-year low in mid-April on demand for gold jewelry and coins. “We continue to see strong interest out of Asia,� Joni Teves, an analyst at UBS AG in London, said in an e-mailed report today. “It looks as though demand for gold out of China so far this year has been exceptional.� Gold for immediate delivery rose 0.1 percent to $1,454.68 an ounce at 10:22 a.m. in London, after declining 1.2 percent in the two previous days. Gold for June delivery advanced 0.4 percent to $1,454 on the Comex in New York. Futures trading volumes were 25 percent lower than the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Buyers in mainland China purchased 223,519 kilograms (223.52 tons) of gold in March, including scrap, compared with 97,106 kilograms in February, Hong Kong government data showed yesterday. SPDR Fund Earlier today, bullion gained as much as 0.4 percent and fell as much as 0.3 percent. Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, declined 0.4 percent to 1,057.79 tons yesterday, the lowest level since March 2009, according to data compiled by Bloomberg. Gold tumbled 13 percent this year as equities rallied and some investors lost faith in the metal as a store of value. The Standard & Poor’s (SPX) 500 Index closed at a record for a fourth straight day yesterday, while the Dow Jones Industrial Average closed above 15,000 for the first time. “Every time we see the U.S. equity market surge, we see a commensurate fall in the gold price,� said David Lennox, an analyst at Fat Prophets. People are switching from gold to equities, he said by phone from Sydney today. Silver for immediate delivery slumped 0.4 percent to $23.8675 an ounce. Spot platinum climbed 0.4 percent to $1,488.35 an ounce, while palladium gained 0.3 percent to $685.48 an ounce. To contact the reporters for this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Source