Gold may drop after a climb to a record for the second time this week prompted some investors to sell the metal. Silver was little changed after advancing to the highest price since March 2008. Gold for immediate delivery advanced to an all-time high of $1,278.02 an ounce yesterday, just two days after breaking a previous record reached in June. The yellow metal was little changed at $1,275.35 an ounce at 12:15 p.m. Seoul time after earlier losing as much as 0.2 percent to $1,272.88 an ounce. “Near-record prices seem to be a burden at the moment, so some investors have a strong appetite to take profit,” said Park Jong Beom, a trader at Tong Yang Futures Trading Co. in Seoul. “Bullion may fluctuate around current levels, but that is probably a short-term breather and gold is highly likely to rebound with the dollar seen weakening going forward.” Gold typically moves inversely to the U.S. currency. The Dollar Index, which measures the greenback’s strength against six major counterparts, lost 2.3 percent this month as the outlook for the U.S. economy worsened, compared with gold’s 2.1 percent advance. The metal is set for a 10th annual gain as investors sought protection against financial turmoil in Europe and the prospect of slowing economic growth. Gold futures for December delivery gained 0.2 percent to $1,276.60 on the Comex in New York after yesterday reaching a record $1,279.50. Interest Rates Holdings in exchange-traded funds backed by the metal have expanded 16 percent this year as U.S. and European central banks keep interest rates at record lows to revive the economy. “The desired physical safe-haven continues to retain investor attention,” Suki Cooper, an analyst at Barclays Capital in London, wrote in a report dated yesterday. Gold, traditionally seen as a hedge against rising consumer prices, advanced 16 percent since the start of January even as U.S. inflation slowed. Inflation expectations, based on the 10- year U.S. Treasury breakeven rate, have fallen to 1.79 percent from 2.2 percent six months ago. Silver for immediate delivery was little changed at $20.7913 an ounce after earlier climbing as high as $20.8275, the highest level since March 18, 2008. The white metal has gained 23 percent this year. Platinum gained 0.3 percent to $1,617 an ounce and palladium climbed 0.8 percent to $554.13 an ounce. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.

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