Gold may decline in London as concerns about Europe’s debt crisis bolster the dollar and cut demand for the metal as an alternative asset. The dollar was little changed near the highest level since February against the euro as China’s Premier Wen Jiabao signaled developed nations should cut deficits and create jobs rather than relying on his country to bail out the world economy. Gold, which reached a record $1,921.15 an ounce on Sept. 6, yesterday fell below $1,800 as some investors sold the metal to cover losses in equity markets. “Although market uncertainty and nervousness should ultimately benefit gold, euro selling against the U.S. dollar is making gold vulnerable in the near term,” Edel Tully, a London- based analyst at UBS AG, wrote in a report. “Gold is not immune to downward pressure whenever risk aversion becomes extreme and assets are broadly sold to raise cash.” Immediate-delivery gold slipped $1.53, or 0.1 percent, to $1,832.07 an ounce by 11:12 a.m. in London. Gold for December delivery was 0.3 percent higher at $1,835.10 on the Comex in New York. The metal rose to $1,829 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,820 at yesterday’s afternoon fixing. 29% Climb Bullion is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. The metal is up 29 percent this year, outperforming global stocks, commodities and Treasuries. Moody’s Investors Service lowered credit ratings for Societe Generale SA and Credit Agricole SA, two of France’s three largest banks by assets. French lenders top the list of Greek creditors with $56.7 billion in exposure to private and public debt, according to a June report by the Bank for International Settlements. Greek Prime Minister George Papandreou holds a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy today to discuss developments in his nation and the euro area. Merkel has said she won’t let Greece fall into “uncontrolled insolvency” because the risk of contagion for the other euro-zone countries “is very big.” ‘Up But Volatile’ “There’s going to be a lot of volatility,” Richard O’Brien, chief executive officer of Newmont Mining Corp., the largest U.S. gold producer, said in a Bloomberg Television interview. “That’s the key point, up but volatile. I don’t think there’s a lot of downside. Gold’s going to trade more and more like a currency instead of like a commodity.” Gold exchange-traded-product holdings fell 0.7 metric ton to 2,149 tons yesterday, data compiled by Bloomberg show. Assets reached a record 2,216.8 tons on Aug. 8. Silver for immediate delivery was little changed at $41.0075 an ounce. Platinum was down 0.3 percent at $1,810.75 an ounce. Palladium declined 0.2 percent to $724.38 an ounce. Platinum is trading close to parity with gold. An ounce of platinum bought 1.18 ounces of gold on average this year, down from 1.32 ounces in 2010. The ratio last month fell to the lowest level in almost two decades. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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