By Claudia Carpenter and Pham-Duy Nguyen Dec. 30 (Bloomberg) -- Gold futures fell for the second straight day as signs that the U.S. economic recovery is accelerating boosted the dollar, curbing demand for the precious metal as an investment alternative. Silver also declined. The greenback gained as much as 0.5 percent against a basket of six major currencies after a report showed companies in the U.S. expanded this month more than economists forecast. Gold has slid 11 percent from a record $1,227.50 an ounce on Dec. 3. “As long as the dollar continues to rally, gold doesn’t have a prayer,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. Gold futures for February delivery fell $5.60, or 0.5 percent, to $1,092.50 on the Comex division of the New York Mercantile Exchange. The price dropped 0.9 percent yesterday. Spot gold declined $3.23, or 0.3 percent, to $1,093.60 at 3:16 p.m. The 20-day moving average at about $1,120 is “perilously close” to the 50-day moving average at $1,118, said Rhona O’Connell, a managing director at GFMS Analytics Ltd., a London-based research company. A drop in the 20-day average below the 50-day line “would not be good news at all” for investors betting on higher prices, O’Connell said. “Technicals look horrid.” Gold futures have gained 24 percent in 2009, heading for the ninth straight annual gain, as the Federal Reserve kept lending rates close to zero percent to spur U.S. growth. The metal more than tripled from $289.60 at the end of 1999. Silver, Platinum Drop Silver futures for March delivery slid 30.8 cents, or 1.8 percent, to $16.802 an ounce in New York. This year, the metal has climbed 49 percent, heading for the biggest annual gain since 1979. The price has tripled from $5.453 at the end of 1999. Platinum futures for April delivery fell $12.70, or 0.9 percent, to $1,463.30 an ounce today. The metal has gained 55 percent this year, heading for the biggest surge since at least 1987. The price has more than tripled from $422.20 at the end of 1999. Palladium futures for March delivery rose $7.25, or 1.9 percent, to $396.10 an ounce. The most-active contract has doubled this year, heading for the biggest increase since 2000. The price has dropped 12 percent from $449.20 at the close of 1999. To contact the reporters on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net

Source