Gold dropped for a second day to the lowest level in seven weeks as Europe’s debt crisis boosted demand for the dollar as a haven, tempering the effect of record investor holdings of the metal. Silver fell to a three-week low. Immediate-delivery gold lost as much as 0.9 percent to $1,650.93 an ounce, the lowest level since Oct. 25, and traded at $1,659.55 at 10:23 a.m. in Singapore. February-delivery bullion declined 0.3 percent to $1,663.10 on the Comex. Moody’s Investors Service said yesterday that it will review the ratings of European Union nations even after a leaders’ summit last week intended to end the crisis. The dollar advanced to a two-month high against the euro today. “The strength in the U.S. dollar is helping to push the gold price lower,� said Alexandra Knight, an economist at National Australia Bank Ltd. “We don’t think what came out of the summit fixes the problem.� Leaders last week agreed at the meeting in Brussels to boost a rescue fund. Fitch Ratings, without taking any action, said yesterday that the summit did little to ease pressure on Europe’s sovereign bond ratings. Gold holdings in ETPs rose 0.2 percent to 2,360.535 metric tons yesterday, putting them on course for a third monthly advance after gaining 3.7 percent last month and 1 percent in October, according to Bloomberg data. Spot silver dropped as much as 1.3 percent to $30.91 an ounce, the lowest level since Nov. 21. Cash palladium declined for a second day, falling as much as 1.5 percent to $651 an ounce. Platinum was little changed at $1,485.75 an ounce. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source