Gold rises from two-week low as investors weigh demand

LONDON: Gold today climbed from the lowest price in almost two weeks as investors weighed signs of stronger physical demand in China and expectations that the US Federal Reserve will reduce stimulus.

Gold added 0.7 per cent to $1,246.18 an ounce. Prices earlier today dropped to $1,231.85, the lowest since January 10. Silver rose by 1.6 per cent to $20.11 an ounce.

In China, which probably overtook India as the biggest bullion consumer last year, volumes for the benchmark contract on the Shanghai Gold Exchange were the most since January 6, when levels reached an eight-month high. China is the fifth- biggest holder by country, World Gold Council data show.

Bullion slid 28 per cent last year, the most since 1981, as some investors lost faith in the metal as a store of value. Fed policy makers said they would cut monthly bond purchases to $75 billion from $85 billion purchases.