Oct. 12 (Bloomberg) -- Gold declined for the first time in three days in New York as a stronger dollar curbed demand for the metal as an alternative asset and as some investors sold bullion after its rally to a record. The dollar gained as much as 0.6 percent against a basket of six major currencies. Before today, gold climbed 8.7 percent in the past month, touching a record $1,366 on Oct. 7 as the dollar lost 6.4 percent against the currency basket. “The dollar trading higher against a handful of currencies is causing short-term bearish momentum in gold,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “It’s rational to expect a pullback after gold rallied to a record.” Gold futures for December delivery fell $5.10, or 0.4 percent, to $1,349.30 an ounce at 10:37 a.m. on the Comex in New York. Gold assets in exchange-traded products declined 1.22 metric tons to 2,083.55 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,097.01 tons on Sept. 30 and are up 16 percent this year. “The pace of buying has slowed” for exchange-traded funds backed by gold, analysts at ScotiaMocatta said today in a report. “With the market so dependent on investors’ off-take to balance the market now that jewelry demand is weak, there is a danger that surplus gold could sit heavily on the market.” Buying Opportunity? A decline in prices may be an opportunity to buy. The metal has outperformed stocks, bonds and some industrial commodities as it heads for its 10th straight annual gain. Prices may gain to $1,400 in three months, $1,525 in six months and $1,650 in 12 months, Goldman Sachs Group Inc. analysts David Greely and Damien Courvalin wrote in a report dated yesterday. Gold should account for 15 percent of a portfolio on a three-year view and 13 percent on a six-month view, Fredrik Nerbrand, the global head of asset allocation at HSBC Bank Plc, said today in a report. The metal is “not merely a hedge against inflation but one of the few assets that hedges against tail risks,” Nerbrand said in “The Allocator” report. “The fact that gold is still under-owned and opportunity costs are still low should boost investor appetite further.” Quantitative Easing The dollar rose before the Federal Reserve today releases minutes of its policy meeting on Sept. 21, when the central bank said it’s willing to ease monetary policy further to bolster the economy. The Fed next month may announce about $500 billion of bond purchases as it undertakes further quantitative easing, said Goldman Sachs. Silver futures for December delivery fell 18.4 cents, or 0.8 percent, to $23.165 an ounce on the Comex. Yesterday, the price reached $23.675, the highest since 1980. Platinum futures for January delivery rose $1 to $1,691.80 an ounce on the New York Mercantile Exchange, and palladium futures for December delivery fell 45 cents to $588.30 an ounce. The metal last week reached a nine-year high of $606.25. --Editors: Daniel Enoch, Millie Munshi. To contact the reporters on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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