Gold rose in London, paring the biggest decline in almost two months yesterday, as a weaker dollar boosted the metal’s appeal as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the greenback’s value, dropped today after gaining 1.4 percent yesterday, the biggest jump in more than four months. European Central Bank and Bank of England are likely today to maintain the pace of bond and asset purchases, according to economists. “Given background fears of inflation and fiat currency devaluation, the metal will continue to be viewed favorably by investors,” James Moore, an analyst at TheBullionDesk.com in London, said today in a note. “We doubt it will be long before gold tests the high from February.” Bullion for immediate delivery rose $7.21, or 0.8 percent, to $970.28 an ounce by 9:17 a.m. local time. The metal, which dropped 1.9 percent yesterday, last traded above $1,000 on Feb. 20. August futures gained $5.50, or 0.6 percent, to $971.10 an ounce on the New York Mercantile Exchange’s Comex division. The ECB will today keep its benchmark interest rate at a record-low 1 percent, according to 52 of 54 economists in a Bloomberg survey. Even as policy makers bicker over the extent of asset purchases, the bank is unlikely to signal it will buy more than the 60 billion euros ($85 billion) of covered bonds it has already announced, economists said. The BOE will refrain from expanding plans to spend 125 billion pounds ($207 billion) in U.K. debt markets and will keep rates at a record low 0.5 percent at today’s meeting, a separate survey of economists showed. The dollar index dropped as much as 0.6 percent today and is down 5.8 percent the past month. Gold has climbed 7.5 percent in the period. Correlation Switch “Risk averse buying has dried up and everybody who wanted to be long in gold already is, while risk sentiment is significantly better,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a note. “We would expect gold’s correlation to the dollar to remain strong, while its correlation to the stock markets will start weakening from now on.” Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, fell to 1,132.50 metric tons yesterday, from a record 1,134.03 tons, the company’s Web site showed. Silver for immediate delivery in London added 0.2 percent to $15.385 an ounce. Platinum gained 0.3 percent to $1,242.45 an ounce, and palladium was 0.7 percent lower at $241.75 an ounce. Palladium held in ETF Securities Ltd.’s exchange-traded commodities rose 4.6 percent to 308,513 ounces yesterday from 294,837 ounces the day before, according to the company’s Web site. Platinum assets increased 1.5 percent to 296,997 ounces.

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