Gold Rebounds on Demand for Hedge From Inflation, Lower Stocks

By Claudia Carpenter

April 22 (Bloomberg) -- Gold rebounded in London as signs of inflation and falling equity markets may spur demand for the precious metal. Silver and palladium also gained.

U.K. money supply probably grew 19.2 percent in March from a year earlier, economists said before an official report today. Gold fell 70 cents yesterday after the Dow Jones Industrial Average climbed 1.6 percent. Futures on the Dow were down 0.7 percent today.

“We have inflation with the money supply, which is good for gold,” said Mario Innecco, a futures broker at MF Global Ltd. in London. “We’re finding a bottom in gold and a top in stock markets.”

Gold for immediate delivery rose $2.25, or 0.3 percent, to $886.05 an ounce at 9:07 a.m. local time. June gold futures climbed 0.5 percent to $886.90 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.

The U.K. money supply report from the Bank of England is set for release at 9:30 a.m. in London.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund in gold, was unchanged at 35.6 million ounces.

Among other metals for immediate delivery, silver gained 0.8 percent to $12.1313 an ounce. Platinum fell 25 cents to $1,160 an ounce, and palladium added 0.8 percent to $225.50 an ounce.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net