By Pham-Duy Nguyen March 16 (Bloomberg) -- Gold prices in New York climbed the most in a month after the dollar weakened, boosting the appeal of the metal as an alternative asset. The dollar fell as much as 0.4 percent against the euro before the Federal Reserve announces interest-rate policy later today. Last year, gold rallied 24 percent as the Fed kept rates near zero, sending the dollar down 2.5 percent against the euro. “No one is expecting an increase in interest rates from today’s meeting,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The Fed is going to have a difficult time raising interest rates during such a fragile recovery. The dollar is weaker and you have a pop in gold and oil.” Gold futures for April delivery rose $19.50, or 1.8 percent, to $1,124.90 an ounce at 10:06 a.m. on the Comex. A close at that price would be the biggest gain for a most-active contract since Feb. 16. Investors in Europe continued to buy gold as an alternative to holding the 16-nation shared currency, analysts said. Gold priced in euros reached a record on March 5. “There is still concern about euro policies,” said Bernard Sin, the head of currency and metals trading at bullion- refiner MKS Finance SA in Geneva. “There’s some physical demand at $1,100 an ounce that’s been supporting the market.” Europe’s Greek Plans European officials worked out a strategy for emergency loans in case Greece’s plan for 4.8 billion euros ($6.6 billion) in tax increases and wage cuts isn’t enough to rein in budget deficits, without giving precise details. “Gold, in foreign-currency terms, continues to be our preferred method of trading,” said Dennis Gartman, an economist in Suffolk, Virginia and the editor of the Gartman Letter. Before today, gold was 9.9 percent below its record of $1,227.50, reached on Dec. 3 in New York. Gold priced in yen, sterling, euros or Swiss francs “is hard upon those December highs or is taking them out,” Gartman said. In other markets, silver futures for May delivery rose 34.2 cents, or 2 percent, to $17.45 an ounce on the Comex. Platinum for April delivery rose $10.30, or 0.6 percent, to $1,626.10 an ounce on the New York Mercantile Exchange. June palladium futures rose $6.65, or 1.4 percent, to $467.30 an ounce on the Nymex. --With assistance from Nicholas Larkin in London. Editors: Ted Bunker, Patrick McKiernan. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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