Gold declines as dollar strengthens

LONDON: Gold today fell as a stronger dollar curbed demand for an alternative investment, narrowing the biggest weekly gain since October 2011 after Federal Reserve called for maintaining stimulus.

Gold fell 0.6 per cent to USD 1,277.96 an ounce. It reached USD 1,298.73 yesterday, the highest since June 24, and is up 4.5 per cent this week.

Silver also slipped 1.6 per cent to USD 19.85 an ounce, cutting its weekly rally to 4.9 per cent, still the most since November. It's the worst performer in the Standard & Poor's GSCI gauge of 24 commodities this year.

The metal climbed the previous four days, the best run since April. The dollar increased 0.3 per cent against six major currencies today, after a 2.2 per cent two-day slide from a three-year high. St. Louis Fed President James Bullard, who has advocated an increase in asset purchases if inflation slows, is due to speak today.

Gold slid 24 per cent this year, wiping USD 60.1 billion from the value of gold exchange-traded product holdings, after some investors lost faith in the metal as a store of value.