By Nicholas Larkin Nov. 4 (Bloomberg) -- Gold rose for the first time in four sessions in London as the dollar weakened against the euro and oil prices rebounded, boosting the metal's appeal as an alternative investment and hedge against inflation. The euro rebounded from a one-week low against the dollar as stocks rose and money-market borrowing costs declined, easing concerns about the extent of the economic slowdown. Oil prices reversed earlier losses to trade little changed before a report that may show accumulating stockpiles of crude in the U.S. The ``softer dollar has prompted some buying interest on the European opening, but given the scale of events this week traders are unlikely to be particularly aggressive,'' James Moore, an analyst at TheBullionDesk.com, said today in a note. The metal is ``likely to spend more time consolidating between $710 and $740'' an ounce, he said. Gold for immediate delivery added $9.98, or 1.4 percent, to $733.43 an ounce as of 11:24 a.m. in London. Futures for December were $7.10, or 1 percent, higher at $733.80 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange. Gold rose to $734 in the morning ``fixing'' in London, used by some mining companies to sell production, from $729.50 at the previous afternoon fixing. The dollar climbed the previous three days on speculation the European Central Bank will lower interest rates to cushion the impact of a slowing economy. ECB and Bank of England policy makers meet Nov. 6, when they will probably reduce interest rates a half point, according to Bloomberg surveys. `Selling Pressure' The relationship between gold and the euro-dollar exchange rate has strengthened this year, with a correlation of 0.58, compared with 0.53 a year earlier. A figure of 1 would mean the two move in lockstep. Bullion prices may drop in the next several days ``as tightening of the dollar may continue,'' Liran Kapeluto, a senior dealer at trading-system operator Finotec Trading U.K. Ltd., said by phone from London. ``In the short term, there is selling pressure on gold,'' he said. Crude oil added 0.9 percent to $64.49 a barrel on the New York Mercantile Exchange today after earlier losing as much as 2.6 percent. Gold assets held in exchange-traded funds managed by ETF Securities Ltd. rose 0.3 percent to 1.534 million ounces today, according to the company's Web site. Gold in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, was little changed at 749.2 metric tons yesterday. Among other metals for immediate delivery, silver rose 15 cents, or 1.6 percent, to $10 an ounce. Platinum added $2, or 0.2 percent, to $822 and palladium was $2.50, or 1.3 percent higher at $203 an ounce. Platinum and palladium are used in autocatalysts. Bayerische Motoren Werke AG, the world's largest maker of luxury cars, lowered its earnings outlook for the second time this year and Japan's Honda Motor Co. cut its 2008 U.S. sales forecast by 4.1 percent because of the faltering economy. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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