Gold declined for a second day in London as a stronger dollar curbed demand for an alternative asset and as some investors sold the metal to cover losses in other commodities. The dollar gained against the euro as European leaders prepared to discuss Greece’s debt crisis amid concern a default risks spreading contagion to other countries. Gold typically moves counter to the greenback. Crude oil fell on concern the crisis will curb the region’s economic recovery, and most industrial metals on the London Metal Exchange declined. “The stronger dollar against the euro is of course a negative factor,” Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. “If other commodities suffer, then gold can be no exception. You cannot rule out that some investors also sell gold to cover losses in other assets.” Immediate-delivery gold declined $6.30, or 0.4 percent, to $1,523.50 an ounce by 9:18 a.m. in London. The metal is down 0.5 percent this week. Gold for August delivery was down 0.4 percent at $1,524.50 an ounce on the Comex in New York. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet today in Berlin to discuss a rescue package for Greece. The country’s Prime Minister George Papandreou is struggling to gain parliamentary approval for a 78 billion-euro ($110.3 billion), five-year package of budget cuts and asset sales by July to ensure Greece receives a new European Union aid package to avoid the euro-area’s first default. Greek Default Outlook A Greek default is “almost certain” and could help drive the U.S. economy into recession, Former Federal Reserve Chairman Alan Greenspan said in an interview yesterday with Charlie Rose in New York. Gold is up 7.2 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. Europe’s debt crisis helped bullion reach a record $1,577.57 on May 2. Fifteen of 23 traders, investors and analysts surveyed by Bloomberg said gold will rise next week. Five expect lower prices and three were neutral. The dip may be a good buying opportunity as the Greek debt crisis “shows no signs of ending,” said Hwang Il Doo, a Seoul- based senior trader at KEB Futures Co. Silver for immediate delivery dropped 1.5 percent to $35.0287 an ounce in London. Palladium fell 1.2 percent to $748.50 an ounce. Platinum was down 0.6 percent at $1,748.10 an ounce, the lowest level since May 23. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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