Gold rises 1 pct on physical buying, China inflation

Reuters (10/7) NewYork -- Gold hit a one-week high on Tuesday, gaining 1 percent on strong physical demand, and as Chinese inflation data boosted the metal's appeal as a hedge. The metal's second consecutive daily gain was sparked by data showing China's annual consumer inflation accelerated more than expected in June. Signs of tightness in gold forward market also boosted investor sentiment. Spot gold touched its highest since July 2 at $1,260.01 an ounce earlier. It traded at $1,245.90 an ounce, up 0.9 percent by 3:34 PM EDT (1934 GMT) U.S. Comex gold futures for August delivery settled up $11 to $1,245.90 an ounce, as trading volume was 15 percent below its 30-day average, preliminary Reuters data showed.