Gold Declines to One-Week Low as Stronger Dollar Reduces Allure

Gold fell in London and New York to more than a one-week low as a stronger dollar dimmed the metal’s appeal as an alternative investment.

The Dollar Index, a gauge of the currency’s value against six counterparts, climbed for a second day, paring this month’s loss to 1.1 percent. The currency’s advance contributed to declines in all precious metals, oil and copper.

“The key driver is very much now the currency movement,” Suki Cooper, an analyst at Barclays Capital, said today by phone from London. Gold may trade little changed through August as investors in Europe and North America take their summer vacations, she said.

Gold futures for August delivery fell $5.20, or 0.6 percent, to $933.90 an ounce as of 8:40 a.m. on the New York Mercantile Exchange’s Comex division. The contract earlier traded at $932.80, the lowest level since July 17. Bullion for immediate delivery in London dropped 0.4 percent to $934.05 an ounce.

Demand may pick up in September before the Indian wedding season begins in October, Cooper said. India is the world’s largest consumer of the precious metal.

The next support level for the metal, indicating clusters of buyers based on technical charts, is at $931.60 an ounce, Credit Suisse said in an e-mailed report today.

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell 3.36 metric tons to 1,083.25 tons as of July 28, according to the company’s Web site.

Spot silver lost 0.9 percent to $13.6150 an ounce. Platinum declined $24.30, or 2 percent, to $1,176.20 an ounce and palladium shed $4.65, or 1.8 percent, to $256.10.