By Pham-Duy Nguyen and Nicholas Larkin March 24 (Bloomberg) -- Gold in New York fell to the lowest price in more than five weeks as a surging dollar curbed demand for the metal as an alternative investment. The dollar rose to a 10-month high against the euro after French and German leaders said any aid package for Greece must include the International Monetary Fund, while Fitch Ratings lowered Portugal’s credit rating. The actions renewed concern that Greece’s fiscal crisis may spread. Last year, gold rallied 24 percent as the dollar fell 2.4 percent against the euro. “You have investors talking about the euro going to parity,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “It’s very hard for the metals to hold up in that environment.” Gold futures for April delivery fell $11.50, or 1 percent, to $1,092.20 an ounce at 10:44 a.m. on the Comex. Earlier, the most-active contract touched $1,087.60, the lowest price since Feb. 12. Fitch cut Portugal’s credit rating by one step, to AA-, with a “negative outlook.” The company cited the government’s weakening finances. The difficulty European nations including Portugal and Greece have in reducing budget deficits has dragged the euro down this year. “The crisis in the Old World shows no signs of letting up,” said Jon Nadler, a Kitco Inc. analyst in Montreal. Fitch’s Portugal downgrade provides a “stark reminder that the region’s fiscal problems are clearly not confined to just Greece.” Since the euro’s debut in 1999, the 16-nation currency has moved in tandem with gold seven out 11 years. Euro Parity The euro will fall to parity with the dollar, Gary Shilling, an economist and the president of A. Gary Shilling & Co., said today in a Bloomberg Television interview. He said Spain may develop the region’s next fiscal crisis. “Uncertainty looms and a potential disagreement on further action within euro-zone policymakers could add selling pressure to the euro,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. That may “pull gold prices lower.” The metal may be supported as investors in Europe turn to gold as an alternative to holding the common currency, some analysts said. Gold priced in euros reached a record on March 5. Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose 4.57 metric tons to 1,120.08 tons as of yesterday. That’s the first increase since March 5. Also in New York, silver futures for May delivery fell 30.7 cents, or 1.8 percent, to $16.72 an ounce on the Comex. Earlier, the most-active contract touched $16.55, the lowest price in three weeks. Platinum futures for April delivery sank $21.50, or 1.3 percent, to $1,587 an ounce on the New York Mercantile Exchange. June palladium futures slid $9, or 1.9 percent, to $455.55 an ounce on the Nymex. --With assistance from Deirdre Bolton in New York. Editors: Ted Bunker, Patrick McKiernan. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg. 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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