Gold rose for a second day in London as a weaker dollar boosted demand for an alternative investment. The euro climbed against the dollar amid optimism a bailout for Ireland will limit contagion across Europe’s larger debt markets and as a report showed German producer prices rose more than economists forecast. Gold, which usually moves inversely to the greenback, headed for a second weekly decline. It reached a record $1,424.60 an ounce on Nov. 9. “The dollar is still in a very unstable position,” said Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva. “The market is still concerned. There’s no confidence in Europe.” Immediate-delivery bullion added $8.73, or 0.6 percent, to $1,361.80 an ounce at 9:32 a.m. in London. Prices are down 0.5 percent this week. The metal for December delivery was 0.6 percent higher at $1,361.50 on the Comex in New York. Ireland’s central-bank governor, Patrick Honohan, said he expects his nation will seek a package worth “tens of billions” of euros to help rescue banks battered by the country’s property slump. Officials of the European Union, International Monetary Fund and European Central Bank yesterday started to study the banks’ books. ETP Holdings “The sentiment is still very strong for gold,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., said by phone today. “Everyone is going to be looking at the dollar and what is happening in Europe.” Gold assets in exchange-traded products fell 4.56 metric ton to 2,082.65 tons yesterday, according to data compiled by Bloomberg from 10 providers. That’s the biggest drop in three weeks. Holdings reached a record 2,104.65 tons on Oct. 14. Twelve of 19 traders, investors and analysts surveyed by Bloomberg, or 63 percent, said the metal will rise next week. Four forecast lower prices and three were neutral. Silver for immediate delivery in London gained 1.6 percent to $27.3875 an ounce. It reached a 30-year high of $29.36 last week and is up 62 percent this year. Canada’s sales of silver coins will jump more than 50 percent this year and will continue to climb in 2011, said David Madge, director of sales at the Royal Canadian Mint. Palladium rose 1.5 percent to $706.25 an ounce after yesterday advancing 5 percent, the most in two weeks. Platinum was 0.2 percent higher at $1,666.25 an ounce. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Wendy Pugh in Melbourne at wpugh@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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