Gold may rebound from the biggest decline in a week on speculation that the global economic recovery may be faltering, spurring demand for safer assets.

Gold for immediate delivery was little changed at $1,239.95 an ounce at 8:59 a.m. in Singapore, after falling 1.3 percent yesterday. August-delivery futures were also little changed at $1,240 an ounce.

“Gold is the ultimate insurance policy in the face of financial market uncertainty and investors continue to receive mixed messages with respect to the broader world economy,” Gavin Wendt, senior analyst with MineLife Pty Ltd. in Sydney. “Continued strong growth amongst emerging economies is being offset by uncertainty in Europe and the U.S.”

Bullion is on course for its biggest quarterly advance since the final three months of 2007, as investors seek to protect their wealth from prolonged financial turbulence in Europe and economic uncertainty. The metal gained 13 percent this year, reaching a record $1,265.30 an ounce on June 21.

Japan’s unemployment rate unexpectedly rose to 5.2 percent in May and households cut spending for a second month, adding to evidence that consumer outlays are too weak to drive the economic recovery. A separate report showed industrial production fell in May as manufacturers accumulated inventories.

‘Bullish’ on Gold

Gold will surge to $1,500 an ounce by the end of 2011, Bank of America Merrill Lynch said, maintaining a forecast made shortly after Lehman Brothers Holdings Inc. collapsed in September 2008.

“We have been bullish on gold for over one and a half years, and we still like gold,” Francisco Blanch, Merrill’s head of global commodities research, said yesterday in New York.

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,316.18 metric tons as of June 28, according to figures on the company’s website.

Silver fell 0.3 percent to $18.705 an ounce, platinum was little changed at $1,566.25 an ounce and palladium was down 0.5 percent at $469.25.