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 Federal Reserve cut interest rates to a record low. Gold, which often moves in the opposite direction to the dollar, is up 1.4 percent this year, the best performing precious metal. “Gold has edged a little higher this morning,” James Moore, an analyst at TheBullionDesk.com, wrote in a note today. It “is likely to take further direction from the greenback in the coming sessions. Due to the shortened trading week, conditions are likely to be quite thin and range bound.” Gold for immediate delivery rose as much as $12.63, or 1.5 percent, to $850.91 an ounce and traded at $845.45 by 11:02 a.m. in London. February futures rose $8.40, or 1 percent, to $845.80 in electronic trading on the Comex division of the New York Mercantile Exchange. The metal increased to $846 in the morning “fixing” in London used by some mining companies to sell production, from $835.75 at the afternoon fixing on Dec. 19. Gold touched a record $1,032.70 in March. The dollar dropped as much as 1.5 percent to $1.4125 against the euro. Thirteen out of 25 traders, investors and analysts surveyed from Mumbai to Chicago on Dec. 18-19 said gold may rise for a third straight week on speculation the dollar will weaken. Seven said to sell, and five were neutral. Platinum, Silver Among other metals for immediate delivery in London, silver added 0.6 percent to $10.955 an ounce. Platinum rose $6.50, or 0.8 percent, to $856 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. “Despite Friday’s decision to provide financial aid to two of the ‘Big-3’ U.S. automakers, the platinum group metals remained in a lackluster mood,” Moore said. “We would look for the metals to hold ground within recent ranges.” To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

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