By Feiwen Rong Oct. 31 (Bloomberg) -- Gold fell for the second day in Asia, extending a monthly drop that may become the worst in more than 25 years, as a stronger dollar and declines in crude oil reduced its appeal as an alternative asset. Gold has tumbled by 16 percent this month, the largest plunge since February 1983, according to Bloomberg data. Oil has slumped 36 percent while the U.S. dollar index against six major currencies gained 8 percent this month. ``The gold price moved lower, influenced by a firmer U.S. dollar against the euro and the easing in oil prices,'' David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney, said in a report today. Bullion for immediate delivery traded 1.3 percent lower at $728.43 an ounce at 4:04 p.m. in Singapore after slumping 2.2 percent yesterday. Silver for immediate delivery declined 4.1 percent to $9.3912 an ounce. The U.S. dollar has gained 11 percent against the euro since the collapse of Lehman Brothers Holdings Inc. on Sept. 15. The U.S. currency traded at $1.27 per euro at 4:06 p.m. in Singapore, from $1.2915 yesterday in New York. Bullion is also under pressure as global interest-rate cuts sparked a rally in stocks yesterday, boosting demand for higher- yielding assets, Ng Cheng Thye, head of precious metals markets at Standard Bank Asia, said by phone from Singapore. Confidence Returns The Federal Reserve provided $120 billion to South Korea, Singapore, Mexico and Brazil to spur lending in emerging markets. Central banks in the U.S., China, Taiwan and Hong Kong cut borrowing costs this week. European Central Bank Governor Jean- Claude Trichet said his board may trim interest rates next week. ``As confidence seems to return to stock markets, some people may prefer to liquidate gold positions to buy stocks,'' Standard Bank's Ng said. December-delivery gold fell 1.5 percent to $727.60 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange. Gold for December delivery in Shanghai fell by 5 percent, the maximum allowed in one day, to 159.09 yuan a gram ($723 an ounce) before settling at 159.53 yuan. Gold for October delivery fell the 150 yen daily maximum to 2,299 yen a gram ($735 an ounce) on the Tokyo Commodity Exchange as of 4:13 p.m. local time. To contact the reporter on this story: Feiwen Rong in Singapore at frong2@bloomberg.net

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