Gold fluctuated near a seven-week high in London as the dollar steadied amid investor concern on the outlook for an economic recovery. The dollar pared gains to trade little changed against the euro as Germany’s Der Spiegel magazine reported that social tensions are rising in Greece as austerity measures hurt the economy, while the Bundesbank raised its growth forecast for Germany this year. Gold usually moves inversely to the greenback. The index of U.S. leading indicators may signal slower growth through the end of the year, economists said. “The presence of uncertainty and risk aversion continues to be seen in physical gold demand,” said Filip Petersson, an analyst at Stockholm-based bank SEB AB. Negative U.S. data today will “certainly lift gold higher. On the other hand, an indication that the U.S. slowdown-fear has been exaggerated would be significantly bearish” for gold, he said. Immediate-delivery bullion lost 57 cents, or 0.1 percent, to $1,228.88 an ounce at 11:30 a.m. in London. Gold touched $1,232.55 yesterday, the highest level since July 1, and today swung between a loss of 0.1 percent and a gain of 0.2 percent. The metal for December delivery was 0.1 percent lower at $1,230.60 on the Comex in New York. Bullion rose to $1,228 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,218 at yesterday’s afternoon fixing. German gross domestic product will increase by about 3 percent in 2010, the German central bank said in its monthly bulletin published in Frankfurt today, lifting its forecast from the 1.9 percent it predicted in June. Slowing Economy Concerns The metal gained 5.7 percent in the three weeks to yesterday as concern deepened that the global recovery may falter. Gold has rallied 12 percent this year, reaching an all- time high of $1,265.30 an ounce on June 21, as the prospect of currency debasement and the European debt crisis prompted investors to seek a refuge. The precious metal is on course for a 10th annual gain. “Concerns about a slowing economy in the second half still prevail, supporting the safe-haven asset,” Lee Suk Jin, a commodities analyst with Seoul-based Tong Yang Securities Inc., wrote in a report today. “In the short term, gold may continue to be propped up by demand from investors trying to avoid risky assets due to uncertainties in the markets.” Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose 0.91 metric ton to 1,295.52 tons yesterday, the company’s website showed. Holdings reached an all-time high of 1,320.44 tons in June. Global holdings of the metal by ETFs rose for six straight days through yesterday, according to Bloomberg data from 10 providers. That’s the longest streak of gains since June 30. Silver for immediate delivery in London rose 0.3 percent to $18.4275 an ounce. Platinum added 0.2 percent to $1,538 an ounce. Palladium declined 0.5 percent to $487.65 an ounce. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net.

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