Gold, at Six-Week High, May Climb on Signs of Faltering Economic Rebound

Gold, trading at a six-week high, may gain as signs that the global economy is faltering increase demand for the metal as a protection of wealth.

Japan’s economy grew at less than a fifth of the pace economists estimated last quarter, pushing it into third place behind the U.S. and China. The dollar fell for the first time in six days against the euro. Gold, up for a third day, usually moves inversely to the U.S. currency.

“The news is obviously not as good,” Wolfgang Wrzesniok- Rossbach, head of sales and marketing at Hanau, Germany-based Heraeus Metallhandels GmbH, said today by phone. “It’s providing more a constant underlying support, but not a real rush for gold. It’s very dependent on what speculators are doing because the physical business is pretty dead at the moment.”

Immediate-delivery bullion added as much as $5.30, or 0.4 percent, to $1,220.80 an ounce, the highest price since July 1. Gold was at $1,218.25 at 9:17 a.m. in London. The metal for December delivery was 0.3 percent higher at $1,220.10 on the Comex in New York.

Bullion has strengthened 11 percent this year and is set for the 10th straight annual advance, the longest winning streak since at least 1920, as investors seek to protect their wealth against financial turmoil. The metal reached a record $1,265.30 an ounce on June 21.

Japan’s gross domestic product expanded at an annualized 0.4 percent rate in the three months to June 30, according to government data released today. That compares with the median economist estimate for 2.3 percent growth in a Bloomberg News survey.

Gold’s ‘Potential’

“In the course of the quite mixed economic data published recently, the interest of investors in safe assets has been noticeably revived,” Eugen Weinberg, head of commodity research at Commerzbank AG, wrote in a report on Aug. 13. “We see further upwards potential with gold.”

Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,286.7 metric tons on Aug. 13, according to the company’s website.

Silver for immediate delivery in London added 0.2 percent to $18.185 an ounce. Platinum gained 0.5 percent to $1,531.45 an ounce. Palladium increased 0.3 percent to $479.55 an ounce.