Gold is set for the biggest monthly gain since May as the dollar declined, helping to bolster demand for the precious metal as an alternative investment. The Dollar Index, a six-currency gauge of the dollar’s value, fell 1.6 percent this month, trading near the lowest in more than a year as an improving economy spurred investment for higher-yielding assets. Japanese manufacturers increased production for a sixth month in August, capping the longest stretch of gains in 12 years. “The dollar is a key driving force for gold,” said Steve Chun, a trader with Hyundai Futures Co. in Seoul. “Still, the market may need a consolidation before another round of rally. Should more data point to a solid recovery in the economies, gold has more room to advance.” Gold for immediate delivery rose 0.2 percent to $994.36 an ounce at 9:25 a.m. in Singapore and climbed 4.5 percent this month, the most since it rallied 10 percent in May. Bullion touched $1,024.28 on Sept. 17, the highest since reaching a record in March, 2008 and is headed for a ninth consecutive annual gain, the longest streak since at least 1949. “Spot gold is starting to show signs of failure ahead of major resistance at $1,033/55,” Karen Jones, a technical analyst with Commerzbank AG, wrote in a report yesterday. “We continue to remain wary of failure/major reversal here.” Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,094.11 metric tons as of Sept. 29, according to figures on the company’s Web site. Among other precious metals, silver rose 0.3 percent to $16.21 an ounce, platinum added 0.7 percent to $1,278 an ounce and palladium jumped 1 percent to $289.75 an ounce.

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