Oct. 21 (Bloomberg) -- Gold fluctuated in New York as the dollar weakened, increasing demand for the precious metal as an alternative investment. The dollar fell against the euro after yesterday slumping the most in more than three months. Gold futures, which usually move inversely to the greenback, reached a record $1,388.10 an ounce on Oct. 14. The dollar gained earlier today after reported comments by U.S. Treasury Secretary Timothy F. Geithner suggested he sees no need for further weakness in the currency. Gold will be supported by “the prospect of additional quantitative easing and from the weaker dollar,” Tom Pawlicki, an analyst at MF Global Ltd. in Chicago, said in a report. “Pressure will be offered by signs that the long-term rally may be a bit overdone.” Gold futures for December delivery added $1.20, or 0.1 percent, to $1,345.40 an ounce at 8 a.m. on the Comex in New York. Prices swung between a loss of 0.2 percent and a gain of 0.4 percent. Bullion for immediate delivery in London was 0.1 percent lower at $1,345.18. Spot prices reached an all-time high $1,387.35 on Oct. 14. Bullion rose to $1,345.25 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,339 at yesterday’s afternoon fixing. Gold, up 23 percent this year, is heading for a 10th annual gain, the longest winning streak since at least 1920 in London. Bullion has outperformed global equities, Treasuries and most industrial metals, prompting record investment in gold-backed exchange-traded products. Gold has gained on speculation the Federal Reserve will next month announce asset purchases to revive the U.S. economy. Group of 20 Group of 20 finance ministers and central bankers meet in South Korea on Oct. 22-23 for talks on how to keep the global recovery progressing amid concern that countries may be vying with each other to weaken their currencies. Geithner said that he’ll use the meeting to help “rebalance” the world economy to be less reliant on U.S. consumers, according to a Wall Street Journal report. Australia & New Zealand Banking Group Ltd. raised its December gold price forecast by 7 percent to $1,420 an ounce, according to an e-mailed report. Prices may peak at $1,550 by September next year, the bank said. “Rising expectations that the U.S. Federal Reserve will introduce further quantitative easing paints a negative outlook for the U.S. dollar and a positive outlook for gold,” wrote Mark Pervan and Natalie Robertson, based in Melbourne. Fed policy makers meet next on Nov. 2-3. ‘Elevated Levels’ Gold will “remain at elevated levels for years” as investors keep bullion as a diversification asset, HSBC Holdings Plc analyst James Steel said today in a report. The bank raised its 2011 forecast for average prices to $1,425, from $1,025. China’s economy grew 9.6 percent in the third quarter, the smallest gain in a year, as inflation quickened to 3.6 percent in September to the fastest pace in 23 months, according to data released today. The increase in gross domestic product from a year earlier topped economists’ median 9.5 percent estimate. “China’s growth is very much in place and as a result of that all commodities are going to be very much in demand,” said Gavin Wendt, senior resource analyst at MineLife Pty in Sydney. “The Chinese have made a strategic decision over the past year to invest more heavily in gold to diversify their foreign reserves away from the U.S. dollar and also encourage their private citizens to effectively invest in gold.” Silver for December delivery in New York gained 0.2 percent to $23.915 an ounce. Futures reached $24.95 on Oct. 14, the highest level since March 1980. The metal will average $20 next year, HSBC said. Platinum for January delivery lost 0.2 percent to $1,684.40 an ounce. Palladium for December delivery added 0.5 percent to $593.40 an ounce. The metal reached $606.25 on Oct. 7, the highest price since June 2001. Platinum will average $1,750 and palladium $675 in 2011, HSBC said. --With assistance from Yoshiaki Nohara in Tokyo and Sungwoo Park in Seoul. Editors: John Deane, Stuart Wallace. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Wendy Pugh in Melbourne at wpugh@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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