Gold Climbs As ECB Rate Reduction May Help Fan Inflation

Gold climbed to near a two-week high on speculation that a decision by the European Central Bank to cut interest rates may help to fan inflation, and after holdings in exchange-traded products expanded to an all-time high.

Immediate-delivery gold gained as much as 0.2 percent to $1,619.13 an ounce and was at $1,619.07 at 10:37 a.m. in Singapore. Holdings in exchange-traded products rose to a record 2,412.42 metric tons on July 3, data tracked by Bloomberg show.

The ECB will probably reduce the benchmark rate 25 basis points to a record low of 0.75 percent today, according to the median forecast in a Bloomberg survey of 62 economists, as policy makers battle the region’s debt crisis. The Bank of England may raise its target for bond purchases today, boosting it by 50 billion pounds ($78 billion), another survey shows.

 

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