By Nicholas Larkin Nov. 14 (Bloomberg) -- Gold fell in London, heading for a weekly decline, as lower oil prices reduced the metal's appeal as a hedge against inflation and government leaders try to solve the worldwide economic crisis. Crude oil slipped in New York after energy-consuming countries cut fuel demand as the global economy slows. A two-day summit begins today in Washington as the Group of 20 nations debate proposals ranging from restraining hedge funds to raising capital requirements for banks and subjecting credit-rating companies to stiffer oversight. ``Crude may buck today and gold may be likely to sink lower,'' said Bernard Sin, currency and metals trading chief at Swiss refiner MKS Finance SA, by phone from Geneva. The G-20 meeting may help the dollar, which would further undermine gold, he said. Gold for immediate delivery lost $7.28, or 1 percent, to $729.22 an ounce by 11:15 a.m. in London. December futures gained $22.30 to $727.30 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange. The metal rose to $729.50 in the morning ``fixing'' in London used by some mining companies to sell production, from $713.50 at the previous afternoon fixing. Gold is heading for a 1.1 percent decline in London this week, after last week gaining for the first time in a month. Bullion jumped 3.4 percent yesterday after U.S. stocks rallied 6 percent in the final hour of the day. The metal has lost 29 percent since reaching a record $1,032.70 an ounce in March as investors liquidated their commodity holdings to raise cash amid the credit crisis. Dollar Factor Crude oil dropped as much 1.9 percent to $57.11 a barrel and last traded at $57.88. The dollar rose 0.6 percent against the euro, potentially lowering demand for gold as an alternative investment. Bullion generally moves in the opposite direction to the U.S. currency. ``We expect the dollar to weaken in the medium term and as the correlation strength remains intact, this should bode well for gold prices,'' Barclays Capital said today in a note. Europe's economy fell into its first recession in 15 years as gross domestic product shrank 0.2 percent in the third quarter, in line with a Bloomberg survey of economists. That may pave the way for deeper cuts to interest rates and taxes amid the worst financial crisis since the Great Depression. Some investors buy gold as a haven in times of financial crisis. Germany, Europe's largest economy, entered its worst recession in at least 12 years, the country said yesterday. Among other metals for immediate delivery, silver lost 0.8 percent to $9.365 an ounce. Platinum added $10.50, or 1.3 percent, to $842, and palladium was $4.25, or 2 percent, higher at $218.25 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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