By Nicholas Larkin Dec. 22 (Bloomberg) -- Gold rose for the first time in three days in London as a weaker dollar increased the appeal of the metal as an alternative investment to the U.S. currency. The dollar fell to an 11-week low against the euro last week after the U.S. Federal Reserve cut interest rates to a record low. Gold, which typically moves in the opposite direction to the U.S. currency, is up 1.8 percent this year as the best performing precious metal. “Gold has edged a little higher this morning as the Euro ticked back above 1.40 and is likely to take further direction from the greenback in the coming sessions,” James Moore, an analyst at TheBullionDesk.com, wrote in a note today. “Due to the shortened trading week, conditions are likely to be quite thin and range bound.” Gold for immediate delivery advanced $10.67, or 1.3 percent, to $848.95 an ounce by 8:45 a.m. in London. February futures rose $11.60, or 1.4 percent, to $849 in electronic trading on the Comex division of the New York Mercantile Exchange. The dollar dropped as much as 1.4 percent today to $1.4101 per euro. Thirteen out of 25 traders, investors and analysts surveyed from Mumbai to Chicago on Dec. 18-19 said gold may rise for the third straight week on speculation the dollar’s rally will stall. Seven said to sell, and five were neutral. Among other metals for immediate delivery in London, silver added 1 percent to $10.9975 an ounce. Platinum rose $14, or 1.7 percent, to $863.50 an ounce, and palladium was 0.7 percent higher at $177.75. President George W. Bush announced on Dec. 19 plans to dispense $13.4 billion in government loans to General Motors Corp. and Chrysler LLC, whose U.S. sales have plunged this year. Platinum and palladium are used in autocatalysts. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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