By Nicholas Larkin Dec. 18 (Bloomberg) -- Gold rose for a ninth day in London, its longest winning streak in two years, as the dollar’s slide boosted the metal’s appeal as an alternative investment and physical bullion purchases increased. The precious metal gained 15 percent in the past eight days, as the dollar lost 12 percent against the euro in the same period. Gold, heading for a second weekly gain, typically moves in the opposite direction to the U.S. currency. German business confidence dropped to a record low this month as the credit crisis pushes Europe’s largest economy deeper into a recession. “The main factor is the euro-dollar,” Manqoba Madinane, a commodity analyst at Standard Bank Group Ltd. in Johannesburg, said by phone today. “We’re also seeing increased buying from investment funds.” Gold for immediate delivery gained as much as $10.72, or 1.2 percent, to $878.63 an ounce and traded at $874.45 by 11:04 a.m. in London. It reached a nine-week high of $882.09 yesterday. February futures added $7, or 0.8 percent, to $875.50 in electronic trading on the Comex division of the New York Mercantile Exchange. The metal rose to $872.50 in the morning “fixing” in London used by some mining companies to sell production, from $870 at the afternoon fixing yesterday. Spot prices, which reached a record $1,032.70 an ounce in March, are up 4.9 percent this year. Gold in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, expanded by more than 6 metric tons to a record 775.33 tons as of yesterday. The previous record was 770.64 tons set on Oct. 13. “Gold is once again back in vogue with investors as demand for safe-haven asset types remain high,” James Moore, an analyst at TheBullionDesk.com, wrote in a note today. Slump Worsens U.S. reports today may show the country’s jobless claims remained elevated and the manufacturing slump accelerated, according to Bloomberg surveys of economists. The worsening economic outlook led the Federal Reserve to slash interest rates to a record low and pledge unlimited purchases of securities. The U.S. Dollar Index, which tracks the currency against those of six trading partners, slipped 1.2 percent to an 11-week low. Among other metals for immediate delivery in London, silver was little changed at $11.41 an ounce. Platinum rose $11, or 1.3 percent, to $876.50 an ounce, and palladium was 1.8 percent higher at $180.75. Truck Woe European heavy-truck sales slumped 28 percent last month, double the drop in October, the European Automobile Manufacturers Association said today. Daimler AG, Volvo AB and MAN AG, Europe’s top three truckmakers, are cutting thousands of jobs and trimming production as the economic slowdown gathers pace. Automakers account for about half of global platinum and palladium consumption, according to estimates by Johnson Matthey Plc, a London-based metals refiner, trader and researcher. The figures take recycling into account. Platinum will struggle to rise beyond a “resistance band” of $880 to $890 because of the car industry slump, Moore said. Some traders use technical levels as signals when to buy or sell. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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