Rebound on its way :)Gold Rebounds as Buyers May Emerge After...

Rebound on its way :)

Gold Rebounds as Buyers May Emerge After Price Drop, Inflation

By Claudia Carpenter

April 20 (Bloomberg) -- Gold rose for the first time in three days in London on speculation signs of inflation and prices near a two-week low will revive demand for the metal.

Prices had dropped 2 percent in the past two days as advances in the dollar and a U.S. government lawsuit against Goldman Sachs Group Inc. curbed demand for commodities. India raised interest rates for the second time in a month to curb inflation and producer prices in Germany, the largest retail investment market for gold, accelerated last month.

�You would expect to see some consumer demand down here,� said Martyn Whitehead, head of metals sales at Barclays Capital in London. �If inflation begins to creep back, that�s a good environment for gold.�

Gold for immediate delivery jumped $5.88, or 0.5 percent, to $1,141.63 an ounce at 9:07 a.m. local time. Bullion futures for June delivery advanced 0.6 percent to $1,142.20 on the Comex in New York.

Producer prices in Germany rose 0.7 percent in March, compared with no change in February, the Bundesbank in Frankfurt said today. Economists expected a rise of 0.5 percent, the median in a Bloomberg survey.

Germany accounted for 134 metric tons of retail investment demand last year, more than all of North America, according to London-based research company GFMS Ltd. The total doesn�t include fund purchases, jewelry or bar hoarding.

India, the world�s largest buyer of gold for jewelry, has inflation of almost 15 percent. Australia�s central bank policy makers cited the country�s mining boom leading to inflation as a reason for raising rates two weeks ago.