By Claudia Carpenter April 15 (Bloomberg) -- Gold dropped in New York as the dollar rebounded after five consecutive declines, eroding demand for the precious metal as an alternative investment. Gold and the U.S. currency usually move inversely, and the metal got an added boost yesterday as oil prices jumped 2.1 percent. The dollar climbed 0.8 percent today against the euro and oil was little changed. “The stronger influence is the dollar,” said Edel Tully, a precious-metals strategist at UBS Ltd. in London. “The market is in a bit of a consolidation mode, which is not a bad thing.” Gold for June delivery dropped $7, or 0.6 percent, to $1,152.60 an ounce at 8:42 a.m. on the Comex in New York. Prices are down from a four-month high of $1,170.70 on Dec. 4. Immediate-delivery bullion declined 0.3 percent to $1,152.43 in London. The metal fell to $1,151.25 an ounce in the morning “fixing” in London, used by some miners to sell production, from $1,153.75 at the afternoon fixing yesterday. Silver for May delivery declined 0.7 percent to $18.285 an ounce. Holdings in the iShares Silver Trust, the biggest stock- exchange product holding silver, decreased 106.74 tons yesterday. Overall silver ETF holdings fell 107 tons yesterday, the largest outflow since mid-January, Barclays Capital said in a report today. Silver’s Fundamentals Silver is mostly used in industrial applications such as electrical switches and batteries. “Given silver’s fundamentals remain weak, should the support from positive investment turn negative, prices are susceptible to sizeable price corrections,” Barclays analyst Suki Cooper wrote in the report. Investors raised ETF holdings of gold by 51 percent last year to “preserve wealth due to their rising concerns regarding currency values and financial stability,” London-based research company GFMS Ltd. said in a report yesterday. Holdings climbed to 1,839 metric tons (59.1 million ounces) from 1,221.9 tons at the end of 2008. They were down to about 55 million ounces as of April 10, according to a presentation from ETF Securities Ltd. New issues last year included Credit Suisse Xmtch, GFMS said. Still, the total exchange-traded product holdings compare with about 85,000 tons of gold held by consumers in the form of jewelry, Philip Klapwijk, GFMS chairman, estimated yesterday. Swiss & Global Asset Management Ltd. said its gold exchange-traded product held 2.283 million ounces on April 13, up from 2.254 million ounces the day before, according to an e- mailed statement. The SPDR Gold Trust, the biggest ETF for the metal, had assets of 1,141.04 tons yesterday, unchanged on the day, according to the company. The palladium ETF in Zurich managed by ETF Securities had a withdrawal equal to 3.7 percent of assets yesterday. The metal has climbed 6.4 percent this week, on course for a third straight weekly gain. It’s up 14 percent in April, headed for a 12th monthly climb in a row. “It’s not surprising to see an element of profit-taking,” Tully said. Palladium for delivery in June dropped 0.3 percent to $546.50 an ounce and platinum for delivery in July fell 0.8 percent to $1,721 an ounce.

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