By Nicholas Larkin Nov. 24 (Bloomberg) -- Gold increased to a five-week high in London as German business confidence slumped and the dollar weakened, increasing the precious metal’s appeal as a haven. Germany’s Ifo institute said today its business climate index dropped in November to the lowest since February 1993, a bigger decline than economists expected, while the dollar fell for the first day in three against six major currencies. Gold, which generally moves in the opposite direction to the dollar, rose 7.9 percent last week, the biggest advance since Sept. 19. “Short-term investors, such as hedge funds, may be coming back into the market after last week’s gain,” Mark O’Byrne, managing director of brokerage Gold and Silver Investments Ltd. in Dublin, said by phone. The German data “won’t do much for confidence.” Gold for immediate delivery rose as much as $19.14, or 2.4 percent, to $819.54 an ounce and traded at $814.42 as of 11:17 a.m. in London. It earlier fell as much as 1.7 percent. December futures were $22.50, or 2.8 percent, higher at $814.30 in electronic trading on the Comex division of the New York Mercantile Exchange. European stocks climbed after Citigroup Inc. received a government guarantee on $306 billion of assets to stabilize the bank after its shares plunged 60 percent last week. The bank will also get a $20 billion cash injection from the Treasury Department, adding to the $25 billion it received last month under the Troubled Asset Relief Program. Raising Cash Gold has slipped 21 percent in London since reaching a record $1,032.70 an ounce in March as investors liquidated their commodity holdings to raise cash amidst the global credit crisis. ING Groep NV cut its 2009 gold forecast by 19 percent to $750 an ounce, in said in a Nov. 21 report. Platinum, silver and palladium estimates were also lowered. “Credit markets thawing further could support precious metal investment sentiment, especially at current prices,” Manqoba Madinane, a commodity analyst at Standard Bank Group Ltd. in Johannesburg, wrote in a note today. Gold in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, increased by more than 3 metric tons to 755.06 tons as of Nov. 21, according to data on the company’s Web site. Eighteen of 40 traders, investors and analysts surveyed from Mumbai to Chicago on Nov. 20 and Nov. 21 advised selling gold this week. Seventeen said buy and five were neutral. A decline this week would be the first in four. Among other metals for immediate delivery in London, silver gained 3 percent to $9.955 an ounce. Platinum rose $13.70, or 1.7 percent, to $840.20 an ounce and palladium was $5.75, or 3.1 percent, higher at $191.25 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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