Aug. 18 (Bloomberg) -- Gold prices fell, heading for the biggest loss in three weeks, as the dollar erased a decline, curbing demand for the metal as an alternative investment. The greenback was little changed against the euro after dropping as much as 0.3 percent. Historically, gold and the dollar move inversely. Before today, bullion climbed 12 percent this year, reaching a record $1,266.50 an ounce in June, as investors sought a shield against financial turmoil and currency debasement. "With a lack of meaningful direction in the dollar today, gold is in pause mode," said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a broker in Chicago. Gold futures for December delivery lost $6.50, or 0.5 percent, to $1,221.80 at 10:12 a.m. on the Comex in New York. A close at that price would be the biggest drop for a most-active contract since July 27. "The recent rise of gold could be a bit overdone," Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by telephone. "There's also been an increase of scrap-gold" supply because of higher prices, he said. Silver futures for September delivery fell 35 cents, or 1.9 percent, to $18.3 an ounce. Platinum futures for October delivery dropped $20.10, or 1.3 percent, to $1,526.50 an ounce of the New York Mercantile Exchange. Palladium futures for September delivery lost $11.80, or 2.4 percent, to $485.50 an ounce.

Source