By Nicholas Larkin and Jae Hur Jan. 29 (Bloomberg) -- Gold, little changed in London today and set for a second monthly drop, may decline as a stronger dollar curbs the metal’s appeal as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the strength of the greenback, was little changed near a five-month high. The dollar has strengthened on concern Greece’s fiscal problems will spread, damping demand for European assets. Gold, down 1.2 percent this month, typically moves inversely to the dollar. “Speculators are still liquidating gold, with no physical buying in sight,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. “Bullion is still trading on the back of swinging currency markets.” Gold for immediate delivery lost $2.78, or 0.3 percent, to $1,084.32 an ounce at 9:18 a.m. local time. The metal is down 0.8 percent this week, heading for a third decline. Bullion for April delivery was 0.1 percent lower at $1,083.40 on the New York Mercantile Exchange’s Comex unit. “Further gains in the dollar would keep gold on the defensive,” said Toby Hassall, an analyst with CWA Global Markets Pty in Sydney. “Prices are finding support at the level of December’s lows.” Eleven of 22 traders, investors and analysts surveyed by Bloomberg said that bullion would decline next week. Seven forecast higher prices and four were neutral. Silver, Palladium Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a seventh day at 1,111.92 metric tons yesterday, according to its Web site. Among other precious metals for immediate delivery in London, silver slipped 0.1 percent to $16.2225 an ounce. Palladium dropped 0.4 percent to $418.65 an ounce, while platinum was 0.3 percent higher at $1,515.50 an ounce. ETF Securities Ltd.’s platinum holdings in its U.S. exchange-traded product rose to 214,900 ounces on Jan. 26 from 194,887 ounces the prior day, according to its Web site. Assets in European and Australian products slid 2.2 percent to 420,506 ounces yesterday, the site showed. European and Australian palladium holdings fell 3.6 percent to 609,978 ounces. Platinum will average $1,800 an ounce this year, up 26 percent from a previous estimate, Goldman Sachs JBWere Pty said in a report, citing an improving economy. Goldman raised its palladium forecast 33 percent to $420 an ounce and increased its silver estimate 25 percent to $21.02 an ounce. To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net

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