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Gold climbs for fourth day on inflation, stocking up in India

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Bloomberg London

Gold today advanced for a fourth day on speculation that rising consumer prices will boost investor demand and that India will stock up on metal.  

The gold rose $2.77, or 0.2 per cent to $1,377.20 an ounce while silver was little changed at $30.63 an ounce in restricted deals. 

The cost of living in the US probably climbed in January for a seventh month, economists said before a Labour Department report due later today.

The UK consumer price index rose to a 26-month high last month. India, the world's largest gold buyer, may accelerate purchases before the government's budget announcement later this month, when gold import duties may be increased, UBS said in a report today. 

 

Concern that rising inflation will erode currency values drove prices up 30 per cent last year, setting a record $1,431.25 in December. China, India, Indonesia, Thailand and South Korea have boosted interest rates as policy makers sought to cool the economies leading a global rebound.

Indian and Chinese jewellery demand climbed to a record last year, the World Gold Council said today.

Usage in India advanced 47 per cent in the fourth quarter to 210.5 tonnes and consumption in China rose 26 per cent to 115.8 tonnes, it said.

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First Published: Feb 17 2011 | 8:01 PM IST

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