By Kim Kyoungwha Dec. 8 (Bloomberg) -- Gold rose for the first time in four days as a 5.6 percent decline from last week’s record price renewed buying interest in the metal. Bullion, which touched a record $1,226.56 an ounce on Dec. 3, dropped the past three days as the dollar strengthened. The Dollar Index, a six-currency gauge of the dollar’s value, fell 0.2 percent to 75.64 at 1:31 p.m. Singapore time. “We’ve seen some buying coming in this morning but we have to keep a close eye on the market,” said Chad Walls, head of precious metals trading with Fortis Bank in Hong Kong. “If the dollar gains momentum again, then we’ll see more selling.” Gold for immediate delivery strengthened as much as 0.9 percent to $1,169.03 an ounce and traded at $1,160.89 at 1:32 p.m. in Singapore. February-delivery gold on the New York Mercantile Exchange’s Comex unit fell 0.2 percent to $1,161.40 an ounce. The bullion will trade between $1,145 and $1,175 an ounce today, Walls forecast. Gold is up 32 percent this year as the dollar fell 6.9 percent against its six major counterparts. “Generally, the dips in gold are a good opportunity,” Walls said. “A lot of people are looking forward for a pull- back, which is healthy for the market. I expect to see a rally into the year end again to test up to the $1,200 area.” The dollar traded at $1.4847 per euro from $1.4827 in New York yesterday, when it reached $1.4756, the highest level since Nov. 4. The U.S. currency may rise today against the euro on signs the global economic recovery is losing momentum, sapping demand for higher-yielding assets. ‘Illusion’ in Gold Gold surged to a record last week after central banks including India, Sri Lanka and Mauritius added more of the metal to reserves, and funds and individuals boosted purchases to protect their wealth against the weaker dollar and on expectations of inflation gains. The Bank of Korea, diversifying foreign-exchange reserves away from a falling dollar, said that additional gold holdings aren’t attractive as most other central banks aren’t buying and the metal offers no cash returns. “There’s an illusion in gold,” Lee Eung Baek, head of the bank’s reserve-management department, said in an interview. “We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?” Most Asian stocks declined today before reports economists expect will show gains in U.K. manufacturing slowed last month and confidence among Japanese merchants declined. The dollar climbed yesterday after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds.” Should investors “start to take profits, then there’s a lot of downside risk,” said Jang Jae Young, head of global markets at Societe Generale SA in Seoul. “The market will be quite volatile in the coming months. If you just take gold from now, it looks too dangerous. There should be some correction.” Silver for immediate delivery climbed 0.1 percent to $18.21 an ounce at 1:38 p.m. Singapore time, palladium rose 0.7 percent to $375.75 an ounce, and platinum gained 1 percent to $1,455 an ounce. To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net;

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