Gold fell in Asia as the dollar strengthened against the euro and equities dropped, reducing demand for the precious metal as an alternative investment. Platinum gained. The euro dropped for a second day against the dollar as traders raised bets that the European Central Bank will cut interest rates to the lowest since 2005 at its Jan. 15 meeting. Asian stocks dropped for a third day on concern an increase in U.S. unemployment signals a worsening global recession. “Gold will keep its inverse relationship with the dollar in the near term,” Zhu Lv, research manager at Shanghai Tonglian Futures Co., said today from Shanghai. “Other factors like the performance of crude oil and equities will also affect the gold price, but to a lesser extent.” Bullion for immediate delivery fell as much as 0.7 percent to $848.60 an ounce, before trading at $853.90 at 10:58 a.m. in Singapore. Gold for February delivery was 0.3 percent lower at $852.30 in after-hours electronic trading on the Comex division of the New York Mercantile Exchange. Still, gold may rebound this week on speculation the dollar will slide, according to 17 of 28 traders, investors and analysts surveyed by Bloomberg. The dollar was at $1.3434 per euro from $1.3476 late Jan. 9 in New York. Gold climbed 5.8 percent in 2008, the smallest gain since 2004 as the dollar advanced against a weighted basket of six major currencies for the first time in three years. Low interest rates and government bailouts may erode confidence in the greenback, analysts said. Among other precious metals for immediate delivery, silver fell 0.7 percent to $11.20 an ounce, platinum was up 0.6 percent at $999.50 an ounce, and palladium advanced 0.4 percent to $193.5 an ounce as of 10:46 a.m. in Singapore.

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