By Kim Kyoungwha March 24 (Bloomberg) -- Gold declined as a stronger dollar and the prospect of higher interest rates sapped investor demand for the precious metal. Gold for immediate delivery fell as much as 0.5 percent to $1,099.50 an ounce as the Dollar Index, a six-currency gauge of the currency’s value, rose for a third day. The metal dipped to $1,092.47 an ounce on March 22, its lowest in almost a month, after India unexpectedly raised interest rates. “The timing of India’s rate hike was surprising and the market is worried that others will follow,” said Kate Harada, a senior trader with Mitsubishi Corp. Futures & Securities Ltd. in Tokyo. “We see some bargain-hunters and physical-related buying in Asia but the pressure is still there on the downside.” Gold traded at $1,100.05 at 2:54 p.m. Singapore time as the dollar gained and the euro weakened amid concern that Greece may be forced to seek aid from the International Monetary Fund. A German Finance Ministry official told reporters in Berlin that Germany and France agreed to back an IMF role. Former U.K. Treasury adviser Roger Bootle said in an interview the 16-nation euro region may be “at the early stages of what may prove to be” a breakup. The euro fell as low as $1.3407 per dollar, the weakest level since May 8, and slid to a record 1.4233 Swiss francs. Gold often trades inversely to the dollar. The U.S. Commodity Futures Trading Commission needs “professional-grade” regulations for metal markets including gold and silver, according to Commissioner Bart Chilton. There needed to be “rational free markets” to ensure there’s no excess speculation and concentration, Chilton said yesterday. The agency, which oversees $5 trillion in daily trading, will hold a public meeting on March 25 to consider limits on positions in metals as part of a plan to prevent anyone or any firm from gaining too much control of a market. Silver for immediate delivery fell 0.9 percent to $16.875 an ounce, platinum declined 0.5 percent to $1,601.75 an ounce and palladium dropped 1.2 percent to $457.50 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net

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