Aug. 3 (Bloomberg) -- Gold fluctuated in London as the metal’s appeal as a protection of wealth waned while a weakening dollar supported demand for an alternative investment. European equities yesterday climbed to a three-month high, while the dollar today slipped to the lowest level against the euro in three months. Bullion and the greenback usually move inversely. Gold climbed the previous four days, the best run of gains since the beginning of June. Earlier this year, “the weakness in the euro was one reason why investors bought gold as a safe haven, but now a weaker dollar is a factor supporting gold again,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. “There is also less reason for buying gold as a safe-haven investment.” Gold for immediate delivery slipped 45 cents to $1,182.40 an ounce at 9:42 a.m. in London. Prices gained as much as 0.2 percent and fell as much as 0.3 percent. The metal for December delivery was 0.1 percent lower at $1,184.60 on the Comex in New York. Bullion has slumped 6.6 percent since reaching a record $1,265.30 an ounce on June 21 on reduced European financial turmoil and on signs of a global economic rebound. Equities gained yesterday after U.S. manufacturing data exceeded forecasts and European banks reported better-than-estimated earnings. Down to $1,160? “With stock markets buoyed by optimism over a stronger economic recovery, people are willing to buy shares and sell gold,” said Wallace Ng, Hong Kong-based executive director with ABN Amro Securities Asia Ltd. “Gold could test the $1,160 level this week.” Rising wages will probably spur household spending in the next few quarters, even as weak job gains hurt consumer confidence, Federal Reserve Chairman Ben S. Bernanke said yesterday. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged for a third day at 1,282.28 metric tons yesterday, according to the company’s website. Low interest rates will increase the metal’s investment appeal, while jewelry buyers are adapting to higher prices, LGT Capital Management said today in a report. Prices may consolidate at about $1,200 an ounce this month before rising to $1,300 in three months, LGT said. Silver for immediate delivery in London was little changed at $18.375 an ounce. Platinum lost 0.6 percent to $1,592.05 an ounce, while palladium added 0.3 percent to $510.25 an ounce. --Editors: Dan Weeks, Stuart Wallace. 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

Source