July 30 (Bloomberg) -- Gold fluctuated in London on speculation that the metal’s biggest monthly decline this year will increase demand. Bullion is set for a third weekly drop and the first monthly slide since March. Prices have slumped 5.9 percent in July, the most since December’s 7 percent retreat, and this week fell to a 12-week low as holdings in gold-backed exchange-traded funds slid. “Despite the scale of selling seen in gold from funds and ETF redemptions, the metal has found good volumes of over-the- counter physical and investment buying,” said James Moore, an analyst at TheBullionDesk.com in London. Gold for immediate delivery added 48 cents to $1,168.73 an ounce at 9:33 a.m. in London. Prices swung between gains and losses of as much as 0.2 percent. Bullion for December delivery slipped 30 cents to $1,170.90 on the Comex in New York. Bullion has slumped 7.6 percent since reaching a record $1,265.30 an ounce on June 21 on an easing of European financial turmoil and on signs the global economy is rebounding. Figures yesterday showed European confidence in the economic outlook rose in July to the highest level in more than two years. “The gold price has recently been under pressure from greater economic confidence and firmer commodity prices, which have taken some of the uncertainty out of financial markets,” said Gavin Wendt, senior resource analyst at MineLife Pty Ltd. “In turn, there has been some selling of gold.” Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,282.28 metric tons yesterday, according to the company’s website. Holdings dropped 18.55 tons on the previous day, the most in more than two years. Nine of 22 traders, investors and analysts surveyed by Bloomberg, or 41 percent, said bullion will rise next week. Eight forecast lower prices and five were neutral. Silver for immediate delivery in London was unchanged at $17.60 an ounce. Platinum lost 0.5 percent to $1,553.25 an ounce, while palladium added 0.2 percent to $485.75 an ounce. --Editors: Dan Weeks, Claudia Carpenter. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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