By Nicholas Larkin July 21 (Bloomberg) -- Gold, little changed in London today, may fall as a stronger dollar reduces demand for the metal as an alternative investment. The dollar gained as much as 0.3 percent against the euro after Federal Reserve Chairman Ben S. Bernanke said the central bank will be able to stem inflation once it begins to raise interest rates. Gold, which tends to move inversely to the greenback, has added 2.4 percent this month as the dollar has lost 1.3 percent against the single European currency. The dollar is “continuing to drive bullion,” Pradeep Unni, a Richcomm Global Services analyst in Dubai, said today in a report. “Gold is struggling again to break and hold above resistance” at $957 an ounce, he said. Bullion for immediate delivery increased 15 cents to $948.85 an ounce by 9:50 a.m. in London. August gold futures slipped 20 cents to $948.60 an ounce on the New York Mercantile Exchange’s Comex division. Bernanke is scheduled to begin his semiannual monetary- policy testimony to Congress in Washington today. The market will be “cautious” before his remarks, Richcomm’s Unni said. The central bank is “confident we have the necessary tools to withdraw policy accommodation when that becomes appropriate,” the Fed chairman said in an opinion article in the Wall Street Journal. SPDR Holdings Oil futures, used by some investors as an indicator of the outlook for inflation, were little changed at $63.97 a barrel in New York, rebounding from a drop of as much as 0.7 percent. Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, was unchanged at 1,094.54 metric tons yesterday, the company’s Web site showed. Silver for immediate delivery in London slipped 0.2 percent to $13.635 an ounce. Platinum lost 0.4 percent to $1,178.75 an ounce after an eight-day advance, its longest since September 2007. Palladium was 0.1 percent lower at $254.20 an ounce. Platinum is “still gaining on firmer gold prices and overall positive sentiment,” Andrey Kryuchenkov, a VTB Capital analyst in London, said in today in a note. “Gains beyond $1,200 an ounce are questionable and would require significant support from improving macro data.” The MSCI World Index of shares climbed as much as 0.5 percent, a seventh consecutive increase and the longest streak of gains in four months. A global economic recovery may increase demand for metals used more in industry. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

Source