By Chanyaporn Chanjaroen

Aug. 13 (Bloomberg) -- Gold rebounded in London as jewelry and investment demand revived after the price of the metal declined to a seven-month low. Platinum and silver also gained.

Gold for immediate delivery added $6.03, or 0.7 percent, to $818.35 an ounce as of 11:20 a.m. London time. It fell to $802.34 yesterday, the lowest since December as the dollar strengthened to the highest in 5 1/2 months. The metal has lost 21 percent from its March 17 record of $1,032.70 an ounce.

There has been ``a lot of demand'' for gold from jewelers and investors after prices fell close to $800, Afshin Nabavi, a senior vice president at MKS Finance SA in Geneva, said today by phone. ``That probably saved gold from collapsing.''

India, the world's biggest buyer of bullion, may increase imports for the first time in 11 months as jewelers rebuild inventories before the festival season starts this month, said Suresh Hundia, president of the Bombay Bullion Association Ltd. Imports fell by more than half in the 10 months ended July 31 from a year ago.

``Demand has been so much in the last couple of days that banks and other importers have run out of supplies,'' Hundia said yesterday in a phone interview in Mumbai, where the grouping of 230 trading companies is based. ``If the price keeps falling, there's no reason why people won't continue to buy.''

The worsening global economic outlook is likely to make gold a safe-haven asset for investors, Nabavi said. Estonia became the second European Union economy to enter a recession after Denmark. Japan's economy, the world's second-largest, contracted last quarter, bringing the country to the brink of its first recession in six years.

Buyers Deterred

Near record prices in the first half depressed global consumption of gold. Demand slid 19 percent in the second quarter to 735.6 metric tons from 905.7 tons a year earlier, the London- based World Gold Council said yesterday in a statement. Purchases for jewelry fell 24 percent and sales to India, the world's largest gold consumer and jewelry buyer, plunged 45 percent, the group said.

Bullion supply rose 1 percent from 797 tons to 802 tons, the council said. Central bank sales fell 43 percent to 88 tons and gold producers bought back 131 tons to eliminate hedge positions.

Pan American Silver Corp., the Vancouver-based company operating mines in the Americas and Russia, said today that second-quarter output rose 11 percent and forecast full-year production of 18.8 million ounces. Output will expand another 33 percent next year to 25 million ounces, it said in a statement.

Silver added 28.50 cents to $14.7850 an ounce.

Platinum increased $34, or 2.3 percent, to $1,511 an ounce and palladium advanced $7.25, or 2.3 percent, to $317.50.