Gold declined for the first time in four days as a rally to the highest level in more than five months prompted sales before the European Central Bank meets to discuss ways to stem the region’s debt crisis. Silver retreated. Immediate-delivery gold lost as much as 0.3 percent to $1,690.40 an ounce, and was at $1,693 at 2:42 p.m. in Singapore. The metal reached $1,699.05 yesterday, the most expensive since March 13. Bullion’s so-called 14-day relative-strength index held for a fourth day above the level of 70 that indicates to some analysts who study such charts that a drop in prices may be imminent. Gold also fell as the euro weakened against the dollar for a second day before data forecast to show retail sales declined and services contracted in the euro area. Bullion tends to trade inversely to the U.S. currency. ECB President Mario Draghi told lawmakers in a closed-door session in Brussels this week the bank’s primary mandate compels it to intervene in bond markets to ensure the euro’s survival. The central bank will announce its next policy decision tomorrow. “Gold price behavior has been strongly correlated to monetary policy expectations,� James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “It is possible that the gold advance could halt temporarily ahead of a European Central Bank meeting and U.S. employment data later this week.� Manufacturing from the U.S. to China and the euro-area shrank in August as Europe’s crisis damped growth. Data on Sept. 7 may show U.S. payrolls grew at a slower pace last month and unemployment exceeded 8 percent for a 43rd month, underscoring Federal Reserve Chairman Ben S. Bernanke’s view the economy may require additional stimulus. Gold almost doubled from December 2008 to June 2011 after the Fed bought $2.3 trillion of debt in two rounds of so-called quantitative easing. Investment Demand December-delivery gold was little changed at $1,693.70 an ounce on the Comex in New York, after topping $1,700 yesterday for the first time since March. Gold is set to climb above $1,800 by the end of this year as central banks’ actions to stoke economic growth boost investment to a record in the second half, Thomson Reuters GFMS said in a report yesterday. Gold assets in exchange-traded products, which expanded to a record 2,467.822 metric tons yesterday, have climbed 4.7 percent this year, data compiled by Bloomberg show. Holdings last month overtook Italy’s to become the world’s third-largest hoard when compared with national reserves. Spot silver fell for the first time in four days, dropping as much as 0.8 percent to $32.0913 an ounce, before trading at $32.1438. The metal reached $32.425 an ounce yesterday, the highest level since April 13. Cash platinum slid as much as 1.1 percent to $1,553.24 an ounce, declining for the first day in four. The metal last traded at $1,554.24, after climbing to a four-month high of $1,570.75 an ounce yesterday. Palladium dropped as much as 0.8 percent to $636.30 an ounce and was at $636.40. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net

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