By Pham-Duy Nguyen June 21 (Bloomberg) -- Gold fell the most in a month, dropping from an all-time high as a strengthening dollar reduced demand for the precious metal as an alternative investment. China, the world’s third-largest economy, ended a two-year peg of its currency to the dollar, a move that may help tame inflation. The dollar strengthened against a basket of six major currencies, and the Reuters/Jefferies CRB Index of 19 raw materials rose 1.6 percent before retreating. Gold set a record $1,266.50 an ounce, surpassing Friday’s all-time high. “By now allowing their currency to rise, it’s going to help the economies of the world,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “The dollar should be screaming higher.” Gold futures for delivery in August fell $17.60, or 1.4 percent, to $1,240.70 an ounce on the Comex in New York, the biggest decline for a most-active contract since May 19. The price has climbed 13 percent this year. Gold historically has moved inversely to the dollar. This year, the metal has also climbed to records in euros, sterling and Swiss francs as Europe’s fiscal woes spurred demand for a haven. “People are going to be quick to pull the sell trigger because gold can’t put together a rally after reaching a record,” said Matt Zeman, a metal trader at LaSalle Futures Group in Chicago. “We also have stronger dollar to put commodities in the red.” Silver futures for July delivery fell 37.6 cents, or 2 percent, to $18.808 an ounce on the Comex. Platinum futures for July delivery gained $3.30, or 0.2 percent, to $1,590.30 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery climbed $3.20, or 0.7 percent, to $494.10 an ounce. --Editors: Michael Arndt, Steve Stroth. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net; To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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