Gold gained in New York as a drop in prices prompted physical buyers to increase purchases of the metal. Palladium climbed to a nine-year high. Gold earlier today declined as the dollar gained against the euro, while holdings in gold-backed exchange-traded products slid for a 10th day yesterday, Bloomberg data show. Bullion futures, which usually move inversely to the U.S. currency, reached a record $1,388.10 an ounce on Oct. 14. “We continue to expect gold physical demand to prevail on dips,” said Walter de Wet, an analyst at Standard Bank Plc in London. “We believe the buying interest is an indication that the physical gold market is slowly adjusting to the higher gold price.” Gold futures for December delivery gained $6.50, or 0.5 percent, to $1,349.10 an ounce at 8:26 a.m. on the Comex in New York. Prices earlier fell 0.5 percent and are up 3.2 percent in October, heading for a third monthly gain. The metal for immediate delivery in London was 0.5 percent higher at $1,350.72. Spot prices reached an all-time high $1,387.35 on Oct. 14. 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. Concern about possible further monetary easing in the U.S. has supported prices this month. Fed Meeting Federal Reserve policy makers meet next on Nov. 2-3. Estimates for the size of the Fed’s asset-purchase program range from $1 trillion at Bank of America-Merrill Lynch to $2 trillion at Goldman Sachs Group Inc. Economists at both firms agree the Fed may start by announcing a $500 billion plan. Prices may be supported by increased jewelry demand in India because of the Diwali religious festival next week, aided by a “favorable” monsoon and high food prices, said Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago. The country is the world’s biggest bullion consumer. “The positive argument will lie in Indian demand,” Pawlicki said. “Farmers should be flush with cash and able to take advantage of the recent drop in gold prices.” Gold assets in ETPs dropped 5.69 metric tons to 2,089.46 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings are up 16 percent this year and reached a record 2,104.65 tons on Oct. 14. Silver for December delivery in New York added 1.3 percent to $24.185 an ounce. Platinum for January delivery gained 0.7 percent to $1,704.50 an ounce. Palladium for December delivery climbed as much as 2.2 to a nine-year high of $643.55 an ounce and was last at $641.75.

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