Gold rose in London, heading for its best quarter in a year, as a weaker dollar boosted demand for the metal as an alternative investment, and as some investors bought bullion after a two-day decline. The dollar fell as much as 0.8 percent against the euro. Bullion, which yesterday traded at its lowest since March 18, and the dollar have returned to an inverse correlation in recent weeks after moving in tandem for most of 2009 as investors sought havens from bank failures and plunging stock prices. “The euro is picking up against the dollar and that’s pushing gold higher,” Sagiv Peretz, a senior dealer at trading- system operator Finotec Trading U.K., said by phone from London. After two days of declines, “bargain hunters went back into the market. Demand for gold is still strong” as a hedge against future inflation, he said. Bullion for immediate delivery rose as much as $6.42, or 0.7 percent, to $922.26 an ounce and traded at $917.02 by 11:42 a.m. local time. It’s up 4 percent this quarter. June futures added 0.2 percent to $919.10 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division. The metal slipped to $918.50 in the morning “fixing” in London, used by some mining companies to sell production, from $928 at yesterday’s afternoon fixing. Spot prices reached a record $1,032.70 in March 2008. Gold has gained the past three months on concern that government stimulus packages will devalue the dollar and stoke inflation. Assets in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, reached a record 1,127.44 metric tons on March 27, according to the latest figures on the company’s Web site. ETF Securities Ltd. today said its gold exchange-traded commodities attracted the most money last week. Monthly Drop Still, the metal is set for its first monthly decline since October, as higher prices deter jewelry buyers and equities climb. The MSCI World Index of shares advanced 6 percent this month while gold has dropped 2.5 percent. Some investors may view the rally in equities in the past three weeks as a sign that the global economy will start to recover faster than previously expected, and inflationary concerns will increase, Peretz said. Still, “gold has suffered a bit from physical demand from jewelry,” he said. Gold imports by India, the world’s biggest buyer, were near “zero” this month, the Bombay Bullion Association Ltd. said today. The country, which imported 21 tons of gold in March last year, may resume imports in about two weeks as stockpiles and scrap supplies recede, the association’s vice president, Harmesh Arora, said. Group of 20 Leaders from the Group of 20 nations will meet in London on April 2 to discuss their response to the global economic crisis. European Central Bank officials meet the same day and will probably lower the interest rate to 1 percent, according to a Bloomberg survey of economists. ECB Vice President Lucas Papademos said last week the central bank may offer longer-term loans and could buy corporate debt to boost the economy. The dollar’s role as a reserve currency and so-called quantitative easing by the ECB will “dominate” precious metals this week, Walter de Wet, a London-based analyst at Standard Bank Ltd., wrote today in a report. “We do not foresee that the dollar will be toppled as global reserve currency, nor do we believe that the ECB will resort to quantitative easing yet,” he said. “But there will be discussion on both points, which should benefit gold.” The dollar briefly plunged and gold spiked on March 25 after U.S. Treasury Secretary Timothy Geithner commented on China’s ideas for a new international reserve currency. The U.S. currency then recouped much of its losses and bullion retreated after Geithner affirmed the dollar should remain the world’s reserve currency. Among other metals for immediate delivery in London, silver rose 0.5 percent to $13.10 an ounce. Platinum gained 0.5 percent to $1,122.75 an ounce, and palladium declined 0.9 percent to $214.25 an ounce.

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