July 15 (Bloomberg) -- Gold rose as a drop in the dollar boosted the appeal of the precious metal as an alternative asset. The dollar fell as much as 1 percent against a basket of six major currencies and touched a nine-week low against the euro. Gold reached a record $1,266.50 an ounce in New York on June 21 and traded at an all-time high in euros. “We remain bullish of gold, although we may soon begin to focus upon gold in dollar terms rather than solely seeing gold in terms of the euro, sterling or even the Swiss franc,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. Gold futures for August delivery rose $2.60, or 0.2 percent, to $1,209.60 an ounce at 9:48 a.m. on the Comex in New York, after earlier gaining as much as 0.9 percent. The euro rose above $1.28 for the first time since May as demand for Spain’s government bonds eased concerns that the nation won’t be able to fund its deficit. Gold reached records priced in sterling and Swiss francs last month amid Europe’s sovereign-debt crisis. Gold traditionally has moved in tandem with the euro as an alternative to the dollar. “Gold seems to be reverting back to its relationship with the dollar,” said Dan Smith, an analyst at Standard Chartered Plc in London. “The safe-haven part for demand is important and will be the most important thing to watch in the next few weeks.” Low Interest Rates The Federal Reserve has held the benchmark U.S. interest rate at zero to 0.25 percent since December 2008 to stimulate the economy. Policy makers cut their forecast for the U.S. expansion, according to the minutes of their June 22-June 23 meeting released yesterday. Goldman Sachs Group Inc. raised its six-month gold forecast to $1,290 from $1,275 and its 12-month estimate to $1,355 from $1,335. The new forecasts were made in a report dated today and the prior estimates were from a note dated June 22. UBS AG today cut its one-month forecast for the metal to $1,230 from $1,300. Silver futures for September delivery rose 4.5 cents, or 0.2 percent, to $18.335 an ounce on the Comex. Platinum futures for October delivery gained $9.40, or 0.6 percent, to $1,530 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery added $4.80, or 1 percent, to $470.60 an ounce on the Nymex. --Editors: Steve Stroth, Patrick McKiernan. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; 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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