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By Bloomberg

Gold advanced for a fifth day to the highest level in more than six weeks on signs the Federal Reserve may delay an interest rate increase as inflation remains low and the selloff in emerging markets spreads.

Gold for immediate delivery climbed 1.4 percent to $1,168.39 an ounce, the highest level since July 7, before trading at $1,163.36 by 12:22 p.m. in Singapore, according to Bloomberg generic pricing. The metal has surged 4.3 percent this week and is set for the biggest such gain since January.

Fed officials showed concern over low inflation, according to the minutes of last month’s meeting, signaling a possible rate increase in December instead of next month. China’s decision to devalue amid slower growth and prospects for higher U.S. interest rates have spurred selling across emerging markets and commodities. A gauge of Chinese manufacturing plunged to a six-year low on Friday.

“The current strength is a combination of the recent bearish data out of China, including the recent currency devaluation, heightening concerns of greater economic issues, and more immediately the fading chances of a Fed lift-off for September,” said Mark Keenan, head of commodities research for Asia at Societe Generale SA in Singapore. “These pockets of strength provide a good selling opportunity,” he said.

Gold is still 1.8 percent lower this year. Prices dropped to $1,077.40 in July, the lowest level in more than five years.

Haven Assets

The preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics was at 47.1 for August, compared with a median estimate of 48.2. Numbers below 50 indicate contraction. The data add to concern that the slowdown in global growth is deepening, boosting the appeal of haven assets.

Traders see the likelihood of a U.S. interest rate rise next month at 32 percent, down from 48 percent on Wednesday, data compiled by Bloomberg show. The prospect of higher rates makes gold unattractive because the metal doesn’t pay interest.

Bullion of 99.99 percent purity advanced as much as 3 percent to 241.82 yuan a gram ($1,175.40 an ounce) on the Shanghai Gold Exchange, up for a fifth day.

Gold futures for December delivery added 0.9 percent to $1,165.20 an ounce, set for a 4.6 percent advance this week. Silver for immediate delivery climbed 0.4 percent to $15.6275 an ounce. Platinum rose 0.3 percent to $1,035.33 an ounce, set for a weekly advance of 4.3 percent, the most in almost two years. Palladium was little changed at $624.75 an ounce.