By Jae Hur Jan. 28 (Bloomberg) -- Gold, little changed, may decline for a third day as the dollar extends gains against major currencies, eroding the metal’s appeal as an alternative investment. Bullion has lost 1 percent in the past two days as the dollar has climbed to near a six-month high against the euro on speculation the Federal Reserve will relax its low-interest rate stance amid signs the U.S. economy is gathering momentum, boosting demand for the nation’s assets. “Gold is looking for some support coming in” as it comes under pressure from the stronger dollar, said Chad Walls, head of precious-metals trading at Fortis Bank in Hong Kong, putting support for prices around $1,075 an ounce. Gold for immediate delivery added 50 cents, or 0.1 percent, to $1,088.40 an ounce at 1:30 p.m. Tokyo time after trading between $1,081.20, the lowest level since Dec. 23, and $1,091.10. Bullion for April delivery added 0.4 percent to $1,089.60 an ounce in New York. The dollar traded at $1.4015 per euro at 1:15 p.m. in Tokyo from $1.4024 in New York yesterday. It earlier touched $1.3938, the strongest since July 14. The Dollar Index, a six-currency gauge of the greenback’s value, strengthened for a third day, gaining 0.1 percent to 78.743. The Federal Reserve reiterated at the conclusion of its two-day policy meeting yesterday that interest rates will stay low for an “extended period” and held its target lending rate at zero to 0.25 percent. The Fed restated its intention to cease buying mortgage-backed securities in March. Stocks Rise “The dollar-yen will be supported as long as Asian stocks hold up after U.S. stocks went up a bit and the FOMC meeting caused the dollar to be bought back,” Akane Vallery Uchida, a currency strategist at Royal Bank of Scotland Group Plc in Tokyo, wrote in a research note today. Economists in a Bloomberg survey forecast U.S. gross domestic product expanded 4.6 percent in the fourth quarter after gaining 2.2 percent in the third. That would be the strongest since the first three months of 2006. The Commerce Department in Washington is set to release the data tomorrow. Among other precious metals for immediate delivery, silver gained 0.2 percent to $16.595 an ounce, palladium added 0.8 percent to $415.25 an ounce and spot platinum rose 0.7 percent to $1,514 an ounce at 1:31 p.m. Tokyo time. To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net

Source