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By Bloomberg

Gold rose for the first time in three days as China reduced the amount of cash lenders must set aside as reserves to stimulate the economy.

China’s reserve ratio will fall 50 basis points on Thursday, the People’s Bank of China said on its website. It cut benchmark interest rates in November for the first time since 2012. Central banks from Europe to Asia are acting to counter slower growth and deflation, even as the Federal Reserve is moving toward raising rates as the U.S. economy strengthens.

“The move can be read as further stimulus easing,” David Jollie, an analyst at Mitsui & Co. Precious Metals Inc. in London said in an e-mail on Wednesday. “If that is read as inflationary or positive for asset prices, it should be positive for gold too.”

Bullion for April delivery rose as much as 0.9 percent to $1,272.10 an ounce and traded at $1,269.60 by 8:22 a.m. on the Comex in New York. Gold for immediate delivery was 0.7 percent higher at $1,269.41 according to Bloomberg generic pricing.

A measure of price swings in gold over 100 days was at 17.5, the highest since March, according to data compiled by Bloomberg.

Prices that slipped 1.5 percent in the previous two days may be spurring more physical purchases in China, which became the biggest gold buyer in 2013. Volumes for the Shanghai Gold Exchange’s benchmark spot contract climbed to a seven-week high before a weeklong break starting later this month.

Holdings in gold-backed exchange-traded products dropped 3.6 metric tons as of Feb. 3, the most in almost a month, data compiled by Bloomberg show. Assets fell from the highest level since October.

Silver for March delivery rose 0.7 percent to $17.435 an ounce on the Comex in New York. Platinum for April delivery increased 0.6 percent to $1,242.60 an ounce, while palladium for March delivery gained 0.6 percent to $790.70 an ounce.