Gold may gain in London as a weaker dollar spurs demand for bullion as an alternative asset and as some investors view the metal’s drop from a record as excessive. The dollar slipped to near a six-week low against the euro as European equities climbed. Gold, which typically moves inversely to the greenback, last week dropped to a five-week low after trading on June 28 within 0.2 percent of a record. “Everybody used to be so bearish on the euro, but it’s turned around,” said Jesper Dannesboe, a senior commodity strategist at Societe Generale SA in London. “That could give a bit of help to gold. Some people may also come in and think gold’s had a nice correction and try to buy.” Gold for immediate delivery added $2.85, or 0.2 percent, to $1,212.13 an ounce at 9:37 a.m. in London. The metal for August delivery was 0.4 percent higher at $1,212.50 on the Comex in New York. Bullion has climbed 10 percent this year, reaching a record $1,265.30 an ounce on June 21, as investors sought to protect their wealth from prolonged financial turbulence in Europe and on concern the global recovery may slow. The metal touched $1,196.65 on July 1, the lowest level since May 25. “With gold touching its lowest close in over a month, we see these levels as a good entry point for fresh long positions,” Hussein Allidina, head of commodity research at Morgan Stanley, wrote in a report today. Service industries in the U.S. expanded in June at a slower pace, economists said before a report today. The data will follow reports last week that showed a slowdown in manufacturing and weakness in housing, at the same time Europe grapples with a debt crisis and China tries to slow its economy. Platinum, Palladium Climb Europe’s Stoxx Europe 600 Index gained for the first time in six days, ending the longest losing streak in a year. Asian shares also rose as Australia’s central bank held interest rates steady and said business investment is set to expand. Silver for immediate delivery in London was 0.5 percent higher at $17.905 an ounce. Platinum was 1 percent higher at $1,519.50 an ounce, and palladium was up 2.3 percent at $438.75 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.

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