By Kim Kyoungwha April 6 (Bloomberg) -- Gold declined as the dollar strengthened and on speculation that the metal’s rise to the highest level in almost a month is prompting some investors to lock in gains. Gold for immediate delivery fell 0.2 percent to $1,129.60 an ounce at 8:35 a.m. in Singapore. The precious metal touched $1,133.40 an ounce yesterday, the highest price since March 8. “Gold is taking a breather after a recent good run,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. “The metal will bounce back though as an improving economy hoists overall demand for commodities.” The dollar gained 0.2 percent against a basket of major currencies on concern Greece will struggle to raise further funds, damping demand for European assets. Gold gained 24 percent last year, while the dollar dropped 4.2 percent. Service industries in the U.S. expanded in March at the fastest pace since May 2006, indicating the country’s recovery is spreading beyond manufacturing and starting to create jobs. The Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose to 55.4 from 53 the previous month, data showed yesterday. Spot gold has recently bounced and is heading back up to its $1,135.50/1,145.25 resistance area, Commerzbank AG technical analyst Karen Jones said, citing the 50 percent Fibonacci retracement of the past three months’ slide and March high. “Short-term risks are skewed to the topside,” Jones wrote in a note yesterday. Fibonacci ratios are used in technical analysis to determine highs and lows for an asset and predict direction. Resistance levels are where sell orders may be clustered. Investors in Europe may continue to buy gold amid mounting regional debt concerns. Spot gold priced in euros “is in new all-time highs,” Jones said, adding that it will target 846.26 euros an ounce. It traded at 839.27 euros today. Platinum for immediate delivery fell 0.6 percent to $1,695.50 an ounce, palladium was little changed at $502.25 an ounce and silver decreased 0.5 percent to $18 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net

Source