By Nicholas Larkin and Kim Kyoungwha March 29 (Bloomberg) -- Gold gained for a third day in New York as a weaker dollar increased demand for the metal as an alternative investment. The dollar slid as much as 0.9 percent against the euro on receding concern that Greece’s financial crisis will derail Europe’s economic recovery. Gold, which dropped to a five-week low last week, typically moves inversely to the U.S. currency. A weaker dollar “is giving a helping hand to gold,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “Demand for physical gold continues to be strong,” particularly from Asia, he said. Gold futures for June delivery added $5.20, or 0.5 percent, to $1,110.60 an ounce at 8:07 a.m. on the Comex in New York. Gold for immediate delivery in London was 0.2 percent higher at $1,109.95. Bullion rose to $1,111.25 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $1,096.50 at the afternoon fixing on March 26. Spot prices, little changed last week, are trading 9.5 percent below a record $1,226.56 set Dec. 3. The euro rose after the European Union enlisted the aid of the International Monetary Fund last week to help Greece finance the region’s biggest budget deficit should it run out of options in capital markets. Concern that European nations including Portugal and Greece will be unable to reduce deficits has dragged the euro 5.8 percent lower against the dollar this year. Holding Above $1,100? “The downside on gold prices is limited,” said Wallace Ng, executive director of the commodity derivatives team at Fortis Nederland NV in Hong Kong. “I don’t see gold trading below $1,100 an ounce or lower for now.” Prices may find support after suicide bombers killed at least 36 people in two subway bombings in Moscow, Nabavi said. The blasts are the deadliest in the city since 2004. Gold futures rose 1 percent on March 26 as the dollar slumped and a South Korean patrol boat sank near the nation’s disputed border with North Korea. U.S. and South Korean officials said there were no indications of North Korea’s involvement. China’s gold usage may double within the next decade, boosting prices as supplies lag behind demand from investors and jewelers, the World Gold Council said. Investment and jewelry demand, which account for 80 percent of purchases in the country, reached 423 metric tons in 2009, while domestic mine supply was 314 tons, according to the group’s data. “China has an insatiable appetite for gold, which looks likely to continue in an environment where domestic mine supply lags behind demand,” the council said in a report today. Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,124.65 tons on March 26, its Web site showed. Silver for May delivery in New York added 1.5 percent to $17.16 an ounce. Platinum for July delivery was 0.9 percent higher at $1,614.60 an ounce. Palladium for June delivery gained 1.7 percent to $462.85 an ounce. To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net.

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