Sept. 30 (Bloomberg) -- Gold futures fell from a record as the dollar halted a slide, eroding demand for the precious metal as an alternative asset. The metal reached a record $1,317.50 an ounce, posting an all-time high for the 10th time this month. The greenback gained as much as 0.4 percent a basket of six major currencies after touching an eight-month low. “Gold is taking its cue from the dollar,” said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. “We’ve seen a reversal in the dollar and a little risk premium is coming out of the gold trade.” Gold futures for December delivery fell $11, or 0.8 percent, to $1,299.30 an ounce at 11:35 a.m. on the Comex in New York. Before today, the metal was up 4.8 percent this month and 5.2 percent in the third quarter. The 14-day relative-strength index, a gauge of price momentum, has been above 70 since Sept. 22, a signal to some traders that the price is poised to decline. “Gold is overbought at this point, but the market is having a hard time selling off,” Zeman said. “This market remains very strong and continues to be bought on dips.” Before today, gold gained 20 percent this year, heading for the 10th straight annual gain, as investors sought an alternative to stocks and bonds. Some investors have turned to cheaper alternatives after gold surged, analysts said. Silver, Platinum “Investors are clearly shifting their focus to precious metals of a hybrid character,” Commerzbank AG said in a report. “These firstly have the status of a safe haven, but also show some correlation with the economic cycle. Silver, platinum and also palladium should therefore remain well supported.’ Silver futures for December delivery fell 37.2 cents, or 1.7 percent, to $21.58 an ounce. Earlier, the metal touched $22.125, the highest level since October 1980. Before today, the price was up 30 percent this year. Platinum futures for January delivery dropped $5.50, or 0.3 percent, to $1,651.10 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery declined $2.40, or 0.4 percent, to $564.90 an ounce. Earlier, the metal reached $582.65 the highest level since March 2008. --With assistance from Nicholas Larkin in London. Editors: Patrick McKiernan, Steve Stroth --Editors: Patrick McKiernan, Steve Stroth To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Source