By Nicholas Larkin July 21 (Bloomberg) -- Gold, little changed in New York and London today, may rise as a weaker dollar increases demand for the metal as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the greenback’s value, declined 0.2 percent, erasing an earlier gain. Gold futures, which tend to move inversely to the currency, have added 2.4 percent this month as the dollar has lost 1.7 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. Gold futures for August delivery added $1.60, or 0.2 percent, to $950.40 an ounce on the New York Mercantile Exchange’s Comex division by 8:32 a.m. in New York. Bullion for immediate delivery in London rose 0.2 percent to $950.54. The metal dropped to $947.75 in the morning “fixing” in London, used by some mining companies to sell production, from $952.75 at yesterday’s afternoon fixing. Spot prices rose for the first week in three last week. Federal Reserve Chairman Ben S. 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. Oil Prices 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. Oil futures, used by some investors as an indicator of the outlook for inflation, rose 1.7 percent to $65.09 a barrel in New York, erasing 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. “Investment is needed to drive gold higher,” John Reade, UBS AG’s head metals strategist in London, said today in a report. “We will not see a strong year for global jewelry demand this year; the gold price is too high.” Silver for September delivery was little changed at $13.62 an ounce in New York. Platinum for October fell 0.6 percent to $1,181.10 an ounce, the first decline in seven days. Palladium for September was unchanged at $256 in New York. 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 0.8 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

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