By Rachel Graham Oct. 29 (Bloomberg) -- Gold advanced for a second day in London as the dollar weakened against the euro, buoying demand for the U.S. currency as an alternative investment. Silver and platinum also rose. The dollar fell for a second day on expectations U.S. interest rates will drop. The relationship between gold and the euro-dollar exchange rate has strengthened this year, with a correlation of 0.58, compared with 0.52 a year earlier. A figure of 1 would mean the two moved in lockstep. ``It's a buying opportunity for gold, the selling pressure on the dollar is high,'' said Liran Kapeluto, a senior dealer at trading-system operator Finotec Trading U.K. Ltd., said by phone from London. Gold for immediate delivery added $2.83, or 0.4 percent, to $749.78 an ounce as of 11:15 a.m. in London. Futures for December added $9, or 1.2 percent, to $749.50 in electronic trading on the Comex division of the New York Mercantile Exchange. Gold may also gain on demand for a hedge against inflation, Kapeluto said. ``If interest rates are low, money is very cheap and it's very easy to create an inflation bubble,'' he said. Some investors buy gold as a store of value in times of high inflation. The Federal Reserve announces its rate decision today. The benchmark rate may be cut by half a point to 1 percent, according to the median forecast of economists surveyed by Bloomberg News. The Fed has already cut the benchmark rate from 5.25 percent in the past 13 months. Among other metals for immediate delivery, silver rose 9.5 cents, or 1 percent, to $9.295 an ounce. Platinum added $5.75, or 0.7 percent, to $816.75 an ounce and palladium gained $6, or 3.3 percent, to $187.50. To contact the reporter on this story: Rachel Graham in London at rgraham13@bloomberg.net

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