NEW YORK (Reuters) - Gold rose on Friday and also posted a weekly gain, as disappointing Chinese trade and new bank-lending data suggested policymakers there may act to boost sputtering growth.
Worries about food inflation also boosted gold after the U.S. government said the worst drought in more than half a century has battered corn and soybean crops in the world's main agricultural exporter with larger losses than expected.
Bullion broke ranks with declining U.S. equities after the latest disappointing Chinese data showed July exports rose just 1 percent from a year ago, with new loans at a 10-month low.
"Gold is up mainly because of the weak manufacturing numbers in China, suggesting that there is a pretty strong indication we are going to see more quantitative easing there," said Jeffrey Sica, chief investment officer at SICA Wealth Management, which has more than $1 billion in assets.
Spot gold rose 0.2 percent to $1,620.60 an ounce by 2:43 p.m. EDT (1843 GMT), rebounding from a low from earlier in the session at $1,605.20.
The metal posted a weekly gain of 1 percent largely on hopes for stimulus measures by China based on weak economic data.
U.S. gold for December settled up $2.60 at $1,622.80 an ounce.
Trading volume totaled around 111,000 lots, about 30 percent below its 30-day average, but still the highest this week, preliminary Reuters data showed.
While food inflation fears boosted gold on the day Sica said, however, rising food commodity prices could hurt rather than help gold prices because they prompted the Federal Reserve to be more vigilant in keeping inflation under control.
Among other precious metals, platinum fell 0.7 percent to $1,395.64 and palladium lost 0.1 percent to $580.22, while silver inched up 0.1 percent at $28.12 an ounce.
The unusual spread between the much-more scarce platinum and gold now stood at an all-time high at over $220 an ounce.
Platinum, which is traditionally more expensive than gold, has been hit particularly hard since the euro zone debt crisis dampened car sales there. Platinum is mostly consumed as an autocatalyst in diesel cars to clean tailpipe emission.
Gold, meanwhile, has been held in a trading range due to uncertainty over whether the U.S. Federal Reserve and European Central Bank will take further steps to boost their economies.
Bullion remains sharply below last September's record high at around $1,920 an ounce and it is only up 3.5 percent year to date.
The next major event for the gold market is likely to be the annual meeting of economists and central bankers in Jackson Hole, Wyoming.
Additional reporting by Siliva Antonioli in London; Editing by Bob Burgdorfer and David Gregorio