Gold declined for the first time in four days in London as a stronger dollar curbed demand for the metal as an alternative investment. The dollar gained against the euro amid speculation Greek Prime Minister George Papandreou will struggle to pass additional austerity measures, even after winning a confidence vote that will pave the way for him to seek approval for a 78 billion-euro ($112 billion) package of budget cuts and asset sales. Gold traded within 1.7 percent of a record set in May. “Dollar gains are holding back gold prices,” John Meyer an analyst at Fairfax IS in London, said today by phone. Still, “investors are looking at uncertainty in Europe,” which will support gold, he said. Immediate-delivery gold declined $4.55, or 0.3 percent, to $1,541.75 an ounce by 11:34 a.m. in London. The metal earlier today reached $1,550.93, the highest price since June 6. Gold for August delivery was down 0.2 percent at $1,543.40 an ounce on the Comex in New York. Bullion rose to $1,546 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,544.75 at yesterday’s afternoon fixing. A total of 155 lawmakers supported the motion in the 300- seat parliament in Athens early this morning, with 143 voting against. European finance ministers said this week that they would hold off on approving a 12 billion-euro payment to the country promised for July until passage of the plans to cut the deficit, sell state assets and impose a “crisis levy” on wages. Europe Debt Crisis The International Monetary Fund, contributor of a third of the bailout money for Greece and the two other euro-area countries that have received bailouts, Ireland and Portugal, has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers.” Gold is up 8.5 percent in 2011 after climbing the past 10 years, the longest run of gains in at least nine decades. Europe’s debt crisis helped bullion reach a record $1,577.57 on May 2. The metal climbed to an all-time high of 958.2467 British pounds today. “In the short-term, while the European crisis hangs on, we should remain long on gold,” said Kishore Narne, head of research at Anand Rathi Commodities Ltd. in Mumbai. “The buying we are seeing right now is driven by haven demand.” Silver for immediate delivery fell 0.9 percent to $36.0075 an ounce in London. Holdings of the metal in exchange-traded products dropped 91.7 metric tons yesterday to 13,460.2 tons, the lowest level since September. Australia’s Perth Mint said it sold a record 10.7 million 1-ounce silver coins since July 1 last year. That’s 66 percent higher than the previous full fiscal year and about 10-fold more than five years earlier. Sales of 1-ounce gold coins will be close to a record, Sales and Marketing Director Ron Currie said. Palladium dropped 1 percent to $761.25 an ounce. Platinum was down 0.6 percent at $1,741 an ounce. To contact the reporters for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Phoebe Sedgman in Wellington at psedgman2@bloomberg.net; To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Source