Gold gained in London as a weaker dollar boosted the appeal of the metal as an alternative investment and on speculation the Federal Reserve won’t start tightening monetary policy soon. Fed Bank of Chicago President Charles Evans yesterday said improvements in the economy, labor market and the outlook for inflation aren’t sufficient for the central bank to begin reducing its record monetary stimulus. The dollar fell to the lowest level in a week against six major currencies. Gold typically moves inversely to the greenback. Recent economic data may allow “policy makers some time before turning hawkish and admitting future liquidity curbs,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. “This means limited downside in gold with the latest dollar rebound also running out of steam for now.” Immediate-delivery gold rose $9.65, or 0.6 percent, to $1,503 an ounce by 9:20 a.m. in London. Prices are up 0.5 percent this week. Gold for June delivery was 0.7 percent higher at $1,502.50 an ounce on the Comex in New York. Concern about faster inflation, Europe’s debt crisis, a weakening dollar and fighting in Libya boosted gold to a record $1,577.57 on May 2. Prices are up 5.8 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. Twelve of 19 traders, investors and analysts surveyed by Bloomberg, or 63 percent, said bullion will rise next week. Three predicted lower prices and four were neutral. Greek Cuts Prime Minister George Papandreou is finalizing the fifth round of deficit cuts to comply with an international bailout as economists, including Nouriel Roubini, say he’ll fail to prevent Greece from becoming the first country to restructure its debt in the euro region. “U.S. dollar weakness and uncertainty surrounding Greece’s debt situation were supports,” Mark Pervan, head of commodity research with ANZ Banking Group Ltd., wrote in a note today. Silver for immediate delivery rose 1.1 percent to $35.4075 an ounce in London. Palladium gained 1 percent to $735.13 an ounce. Platinum was 0.4 percent higher at $1,772.35 an ounce. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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