Gold declined for the first time in three days in London as a stronger dollar and higher interest rates in China curbed demand for an alternative investment. China said it will raise interest rates from tomorrow for the third time this year after inflation accelerated to the fastest pace since July 2008. The dollar gained against the euro after Moody’s Investors Service cut Portugal’s credit rating to junk status, stoking speculation the nation will need a second bailout. Gold typically moves counter to the greenback. There is “bearish pressure from potentially higher interest rates,” which increase the opportunity cost of holding bullion, said Filip Petersson, an analyst at SEB AB in Stockholm. “It all comes down to the real interest rate, will it rise or fall? Dollar strength is normally bearish for gold prices.” Immediate-delivery gold slipped $4.85, or 0.3 percent, to $1,510.80 an ounce by 12:20 p.m. in London. Gold for August delivery was 0.1 percent lower at $1,511.30 an ounce on the Comex in New York. To contact the reporter for this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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