By Jae Hur and Gavin Evans July 16 (Bloomberg) -- Gold declined for the first time in six days as the dollar rebounded, reducing the appeal for the precious metal as an alternative investment. The Dollar Index climbed from near a five-week low after charts showed its 1.4 percent drop in the past month was excessive. Bullion jumped 1.5 percent to a two-week high yesterday as oil rose the most in three weeks and a report showed U.S. consumer prices climbed the most in a year in June. “The dollar’s rally today helped drag gold down,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo. Kikukawa pegged a range for gold between $900 and $950 an ounce in the short term. Gold for immediate delivery fell 0.3 percent to $936.55 an ounce at 12:19 p.m. in Singapore after touching $942.21 yesterday, the highest since July 1. Bullion had gained 3.3 percent in the previous five days. Gold futures for August delivery slipped 0.3 percent to $936.40 an ounce on the New York Mercantile Exchange’s Comex division. The contract climbed 1.8 percent yesterday, the biggest one-day gain for the active contract since April 20. The Dollar Index, which the ICE uses to track the dollar against the currencies of six major U.S. trading partners including the euro and the yen, rose as much as 0.4 percent to 79.604 before trading at 79.569 by 12:23 p.m. Singapore time. Yesterday it fell to 79.291, the lowest level since June 11. Gold’s recent gain, after a three-day U.S. equity rally, shows the extent of investor inflation concerns, said Ben Westmore, energy and minerals economist at National Australia Bank Ltd. ‘Nothing Changed’ “Nothing has really changed” in the inflation outlook, Westmore said by phone from Melbourne. “We’re going to have a higher level of interest in gold” until the Federal Reserve and other central banks say when they will stop providing additional liquidity into financial markets, he said. The Dow Jones Industrial Average jumped the most in three months yesterday after Intel Corp.’s sales forecast beat analysts’ estimates and New York manufacturing improved. Stocks extended gains even as Federal Reserve minutes showed bank officials were concerned at the weak state of the U.S. economy at their June 23-24 meeting. Some investors may be waiting for proof of the rising equities trend and their demand for gold will likely diminish this year, Westmore said. That will be offset by improving physical demand in the fourth quarter, when gold futures will likely average $953 an ounce, he said. Crude oil for August delivery traded at $61.48 after gained as much as 4.2 percent in New York yesterday, buoyed by rising equity prices and a drop in stockpiles. Among other precious metals for immediate delivery, silver was little changed at $13.2725 an ounce and platinum jumped as much as 1.3 percent to $1,177.75 an ounce before trading at $1,162.50 by 12:27 p.m. Singapore time. Palladium fell 0.5 percent to $246.50 an ounce. To contact the reporters on this story: Jae Hur in Singapore at jhur1@bloomberg.net Gavin Evans in Wellington at gavinevans@bloomberg.net

Source