Gold prices climbed in Asian trade Wednesday after reports said China, the world's largest gold producer, decided to expand its market.

Spot gold was seen trading at $1192.01 an ounce at 12.00 noon Singapore time while December-delivery futures was at $1195.30 an ounce on the Comex division on Nymex.

Silver for immediate delivery climbed 1 per cent to $18.5625 an ounce, platinum advanced 0.7 per cent to $1593.70 an ounce, and palladium rose 0.8 per cent to $505.40 an ounce.

Analysts said the precious yellow metal climbed for a sixth day, the longest run of gains in two months, on optimism that China's decision to relax rules on trading the metal will help to increase investor demand.

The Peoples Bank of China on Tuesday relaxed norms for gold import by country's banks and also allowed foreign companies more access in gold trade in the country.

Chinese gold imports have been climbing as the central bank started to build gold reserves in recent years and domestic interest in gold investment grew.

China is the world's largest gold producer, and demand for the precious metal increased in the first half of this year as local equities declined and the government took steps to cool the property market.

Meanwhile, the US dollar retreated on the news, further supporting dollar-denominated gold by making it less expensive for buyers using other currencies.

The dollar traded near a three-month low against the euro, boosting the appeal of the metal as an alternative investment.

On Tuesday, the most actively traded gold contract, for December delivery, rose $2.10, or 0.2 per cent, to settle at $1187.50 an ounce on the Comex division of the New York Mercantile Exchange.

Gold China