Gold declined for the first time this week in London as a stronger dollar curbed demand for bullion as an alternative investment. The euro fell to a two-month low against the dollar after Market News International said the European Central Bank was reluctant to start buying government bonds. The ECB and Bank of England meet today, and ECB President Mario Draghi said yesterday that Europe’s debt crisis is starting to hurt Germany. The Greek government approved austerity measures. “High hopes for a positive austerity vote by Greek lawmakers last night did little for the euro, with the dollar holding near recent highs,� Andrey Kryuchenkov, a London-based analyst at VTB Capital, wrote in a report today. “We expect bullion to track the broader market for now, trading against the dollar.� Gold fell 0.2 percent to $1,715 an ounce at 11:24 a.m. in London. The futures for December delivery were little changed at $1,714.70 an ounce on the Comex in New York. Prices in London have advanced 9.7 percent this year as central banks including the Federal Reserve took steps to shield their economies hurt by Europe’s crisis. President Barack Obama elected for a second term faces the task of reaching a compromise with Congress on lowering the deficit before more than $600 billion in tax increases and spending cuts start in January. “Gold continues to trade as a risk asset rather than a risk hedge, suggesting that the focus for the time being on the ’fiscal cliff’ negotiations should support the dollar and limit further upside moves in the short term,� Citigroup Inc. said in a report e-mailed today. Gold was little changed at $1,715 an ounce in the morning “fixing� in London, used by some mining companies to sell output, from $1,715.25 yesterday afternoon. The dollar rose to a one-month high against a six-currency basket. Silver for immediate delivery fell 0.5 percent to $31.68 an ounce. Platinum was down 0.2 percent at $1,540.38 an ounce and palladium dropped 0.9 percent to $607 an ounce. To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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