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By Bloomberg

Gold held a rebound from a two-week low after reports showed signs of uneven U.S. expansion, boosting speculation the Federal Reserve may push back the timing of the first interest rate increase since 2006.

Bullion for immediate delivery rose as much as 0.4 percent to $1,207.70 an ounce before trading at $1,202.96 by 1:01 p.m. in Singapore, according to Bloomberg generic pricing. The metal dropped to $1,184.10 on Tuesday, the lowest level since April 1. Gold in Shanghai climbed after two days of losses.

Gold fell 2.4 percent last month on speculation that rates would climb, damping the metal’s appeal because it generally offers returns only through price gains. The dollar weakened on Wednesday after reports showed that industrial output slipped more than projected in March and factories in New York struggled. The Fed is examining data to determine the best time to raise benchmark borrowing costs.

“The U.S. dollar remained on the back foot as the first of the second-quarter data disappointed,” Australia & New Zealand Banking Group Ltd. wrote in a note. “These data suggest that the probability of the Fed commencing its tightening cycle in June continues to diminish,” it said.

The Fed’s report on factory output showed total industrial production declined 0.6 percent in March, compared with a fall of 0.3 percent projected in a Bloomberg survey of economists. Utility output posted the biggest decrease since January 2006 and mining production also fell.

The New York Fed’s Empire State Index showed manufacturing in the state unexpectedly shrank this month. A separate report showed homebuilders confidence rose in April for the first time in five months. The Bloomberg Dollar Spot Index was 0.1 percent lower on Thursday, heading for a third straight day of losses.

Gold for June delivery traded at $1,200.10 an ounce from $1,201.30 on the Comex. Bullion of 99.99 percent purity climbed 0.9 percent to 240.44 yuan a gram ($1,206.64 an ounce) on the Shanghai Gold Exchange.

Silver for immediate delivery increased 0.1 percent to $16.3678 an ounce. Platinum retreated 0.1 percent to $1,161.13 an ounce, while palladium was little changed at $770.10 an ounce.